The close: Stocks gain as Trump boosts hopes of stimulus

U.S. and Canadian stocks ended higher on Thursday as comments by U.S. President Donald Trump fueled hopes of fresh fiscal support, while data underscored the view that the labor market recovery was struggling to gain momentum. The energy sector led the advance on both sides of the border.

Two days after calling off negotiations on a comprehensive bill, Trump in an interview with Fox News said talks with Congress have restarted over further COVID-19 relief and that there was a good chance a deal could be reached. But he gave no other details about a possible agreement.

While late afternoon trading was choppy, indexes added to gains after a White House spokeswoman said Trump wanted a “skinny” coronavirus relief bill.

House of Representatives Speaker Nancy Pelosi said legislation to help airlines was a matter of national security and could only move through Congress with guarantees of work continuing on the comprehensive deal.

The Dow Jones airlines index jumped 1.6%, extending recent gains.

“We’re clearly being pushed around by the prospect of getting further fiscal stimulus. That’s entirely the driver,” said Art Hogan, chief market strategist at National Securities in New York.

“The market is just reacting to every utterance of where we stand on fiscal policy.”

Canada’s S&P/TSX Composite Index ended up 106.24 points, or 0.65%, at 16,534.54. The energy sector gained just over 5% as oil settled above US$43 a barrel on support from output shutdowns ahead of a storm in the U.S. Gulf of Mexico and the possibility of supply cuts from Saudi Arabia and Norway.

Energy markets rose sharply at noon on a Dow Jones Newswires report that Saudi Arabia is considering reversing course over OPEC’s planned production increase early next year.

Brent crude settled up $1.35, or 3.2% to $43.34, after falling 1.6% on Wednesday. U.S. West Texas Intermediate (WTI) crude added $1.24 cents, or 3.1%, to $41.19 after falling 1.8% on Wednesday.

Oil also gained support from the prospect of more production outages in the North Sea because of a workers' strike. Oil firms and labor officials said they will meet with a state-appointed mediator on Friday in an attempt both sides hope will bring an end to a strike that threatens to cut Norway’s oil and gas output by some 25%.

The S&P 500 energy index led sector percentage gains on Wall Street, rising 3.8% on the day, following a jump in oil prices.

The Dow Jones Industrial Average rose 122.05 points, or 0.43%, to 28,425.51, the S&P 500 gained 27.38 points, or 0.80%, to 3,446.83 and the Nasdaq Composite added 56.38 points, or 0.5%, to 11,420.98.

Data on Thursday showed the number of Americans filing new claims for jobless benefits drifted lower last week but signaled the labor market was making little headway in getting millions of people back on the job after being out of work due to COVID-19 disruptions.

Strategists say investors are also beginning to digest the prospect of Democratic presidential nominee Joe Biden winning the Nov. 3 election.

Biden appeared to lead Trump among likely voters in Florida and the two were locked in a tight race in Arizona, according to Reuters/Ipsos opinion polls released on Wednesday.

“What the market is actually starting to warm up to is a Democratic sweep in the election cycle. If it’s a decisive win, you take away the drama of a contested election,” Hogan said.

Advancing issues outnumbered declining ones on the NYSE by a 3.51-to-1 ratio; on Nasdaq, a 2.04-to-1 ratio favored advancers.

The S&P 500 posted 58 new 52-week highs and no new lows; the Nasdaq Composite recorded 118 new highs and 12 new lows.

Volume on U.S. exchanges was 8.92 billion shares, compared with the 9.76 billion average for the full session over the last 20 trading days.

Reuters, with files from Darcy Keith of The Globe and Mail

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