NEW YORK (AP) — Stocks are drifting around their record highs on Wall Street Thursday, as earnings season ramps into higher gear.
The S&P 500 was virtually unchanged in early trading, a day after reaching an all-time high amid enthusiasm about COVID-19 vaccines leading to an economic recovery and expectations that Washington will deliver more stimulus for the economy.
The Dow Jones Industrial Average was down 20 points, or 0.1%, at 31,167, as of 9:48 a.m. Eastern time, and the Nasdaq composite was 0.2% higher. All three indexes were flipping between small gains and losses in the first few minutes of trading.
Optimism about a strengthening economy later this year has been powerful enough to paper over worries about today’s struggles. On Thursday, a report showed that 900,000 U.S. workers filed for unemployment benefits last week, as the worsening pandemic forces businesses to shut down and lay off employees. The number was less terrible than the prior week’s 926,000, but it’s still incredibly high compared with history.
Wall Street has actually seen such miserable numbers as a reason for optimism in the past, perversely, because they add urgency on Congress to deliver more aid for the economy.
President Joe Biden has already proposed a $1.9 trillion plan, including $1,600 cash payments for most Americans and other assistance for the economy. Even though his Democratic party controls both houses of Congress, the proposal will likely face resistance given how slim the majority is.
Other reports on the economy were more encouraging on Thursday, including better-than-expected data on the homebuilding industry and manufacturing in the Philadelphia region.
More companies are also telling investors how badly their profits got hid during the last three months of 2020, when coronavirus counts and deaths were soaring. Wall Street came into this earnings reporting season with low expectations, forecasting a fourth straight quarter of profit declines. But most companies have been topping expectations.
Travelers rose 3.4% for one of the biggest gains in the S&P 500 after the insurer reported a much stronger profit for the latest quarter than analysts expected. Banking company KeyCorp rose 2% after it also reported healthier earnings than forecast.
Homebuilders D.R. Horton and Lennar were each rising at least 3.1% following the encouraging report on housing starts, while Paccar climbed 3.1% after saying it will partner with autonomous-vehicle company Aurora to develop self-driving Peterbilt and Kenworth trucks.
On the losing end was United Airlines, which fell 5.5% after reporting a worse loss for the end of 2020 than analysts expected. The worsening pandemic is keeping fliers out of the skies, and the company’s forecast for revenue at the start of 2021 fell short of analysts’ expectations.
The yield on the 10-year Treasury rose to 1.11% from 1.07% late Wednesday.
In European stock markets, Germany’s DAX was virtually unchanged, and France’s CAC 40 slipped 0.4%. The FTSE 100 in London was flat.
In Asia, South Korea’s Kospi rose 1.5%, Hong Kong’s Hang Seng slipped 0.1% and stocks in Shanghai added 1.1%.
Japan’s Nikkei 225 rose 0.8% as exports for the world’s third-largest economy rose for the first time in two years.
Japan’s economy, like many others, has been slammed by the coronavirus pandemic, which has crushed tourism and dampened economic activity and trade. The Bank of Japan kept its easy monetary policy at its policy board meeting, as expected.