Stocks Add to Strong Weekly Gains…..

U.S. stocks extended a solid weekly gain as the markets held onto hope of further fiscal relief measures, despite comments from House Speaker Nancy Pelosi that sparked some brief volatility. The markets eyed further progress on the COVID-19 treatment/vaccine front after Regeneron followed Eli Lilly in approaching the FDA for Emergency Use Authorization of its COVID-19 treatment. In economic news, weekly initial jobless claims improved slightly but remained noticeably elevated. Treasury yields dipped as bond prices nudged higher and the U.S. dollar was little changed. Gold and crude oil prices advanced. Dow member IBM announced plans to spin-off its managed infrastructure services unit and Morgan Stanley announced a $7.0 billion agreement to acquire Eaton Vance, while McDonald’s and Costco posted better-than-expected sales. Asia finished mostly higher, though Chinese markets remained closed for a holiday, while Europe gained ground.

The Dow Jones Industrial Average rose 122 points (0.4%) to 28,426, the S&P 500 Index increased 27 points (0.8%) to 3,447, and the Nasdaq Composite gained 56 points (0.5%) to 11,421. In moderate volume, 799 million shares were traded on the NYSE and 3.4 billion shares changed hands on the Nasdaq. WTI crude oil was $1.24 higher at $41.19 per barrel and wholesale gasoline gained $0.03 to $1.23 per gallon. Elsewhere, the Bloomberg gold spot price advanced $6.96 to $1,894.39 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was little changed at 93.62.

Jobless claims report show continuing claims continue to decelerate…..

Weekly initial jobless claims came in at a level of 840,000 for the week ended October 3rd, above the Bloomberg estimate of 820,000 and just shy of the prior week’s upwardly-revised 849,000 level. The four-week moving average declined by 13,250 to 857,000, while continuing claims for the week ended September 26th dropped by 1,003,000 to 10,976,000, south of estimates of 11,400,000. The four-week moving average of continuing claims fell by 642,000 to 12,112,250.

Treasuries were higher, with the yield on the 2-year note dipping 1 basis point (bp) to 0.15%, while the yields on the 10-year note and the 30-year bond declined 2 bps to 0.76% and 1.56%, respectively. The Treasury yield curve has steepened a bit amid heightened volatility induced by increased political uncertainty and as the markets grapple with whether we will get some form of new fiscal relief, while the Fed continues to pledge to do whatever it can to bolster the economic recovery.

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