Hopes of a Fiscal Package Emerge, but Caution Apparent…..

U.S. equities finished higher, with tech shares leading the way, as investors took some solace in headlines that progress was being made for Congress to reach a deal on an expected new fiscal relief package. Moreover, a better-than-expected read on weekly initial jobless claims lent some support, but gains remained somewhat muted with the markets cautious ahead of tomorrow’s key July labor report. Treasury yields were mixed and the U.S. dollar ticked lower, while crude oil prices lost modest ground in choppy action and gold posted another record high. In equity news, Costco Wholesale delivered much stronger-than-expected July sales figures, Viacom-CBS topped estimates, and Bristol-Myers Squibb bested revenue forecasts and received a favorable court ruling pertaining to its blood-thinning treatment Eliquis. Elsewhere, Met Life missed the Street’s quarterly expectations. Europe finished lower despite some upbeat data and following the Bank of England’s unchanged monetary policy, while markets in Asia were mixed.

The Dow Jones Industrial Average rose 185 points (0.7%) to 27,387, the S&P 500 Index increased 21 points (0.6%) to 3,349, and the Nasdaq Composite gained 110 points (1.0%) to 11,108. In moderate volume, 806 million shares were traded on the NYSE and 4.0 billion shares changed hands on the NASDAQ. WTI crude lost $0.24 to $41.95 per barrel and wholesale gasoline was up $0.01 at $1.23 per gallon. Elsewhere, the Bloomberg gold spot price advanced $18.66 to $2,037.87 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.6% lower to 92.84.

Jobless claims come in better than expected…..

Weekly initial jobless claims came in at a level of 1,186,000 for the week ended August 1st, better than the Bloomberg estimate of 1,400,000, and compared to the prior week’s upwardly-revised 1,435,000 level. The four-week moving average decreased by 31,000 to 1,337,750, while continuing claims for the week ended July 25th fell by 844,000 to 16,107,000, below estimates of 16,900,000. The four-week moving average of continuing claims declined by 413,250 to 16,628,250.

Treasuries were mixed, as the yield on the 2-year note ticked 1 basis point (bp) higher to 0.12%, while the yield on the 10-year note was flat at 0.54%, and the 30-year bond rate decreased 2 bps to 1.20%.

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