S&P 500 and Nasdaq rise and hit report highs as financial hopes stay excessive

The S&P 500 and Nasdaq Composite rose to record highs Thursday, bolstered by hopes that Washington will get additional financial aid before the end of 2020.

The S&P 500 gained 0.4% and the tech-heavy Nasdaq rose 0.5%. The Dow Jones Industrial Average rose 107 points, or 0.4%.

Utilities and Materials were the best performing sectors in the S&P 500, up 1% each. Johnson & Johnson rose 1.8% to keep the Dow higher.

Congressional leaders on Wednesday closed a $ 900 stimulus package that would include direct payments to individuals.

The measure would exclude corporate liability protection and aid to state and local governments, CNBC confirmed. Disagreements on these issues were a stumbling block in the last round of negotiations.

Senate Majority Leader Mitch McConnell, R-Ky. said Thursday that a coronavirus relief deal was in the immediate vicinity.

The latest round of US economic stimulus comes as Covid-19 cases rise at a record pace. The U.S. has at least 215,729 additional Covid-19 cases each day based on a 7-day average calculated by CNBC using data from Johns Hopkins University. More than 247,000 new infections were confirmed on Wednesday alone.

This resurgence in Covid-19 cases has led states to adopt stricter social distancing measures that are slowing down parts of the economy, particularly the labor market.

On Thursday, the data showed that the number of jobless claims was 885,000 for the past week, its highest level since early September. Economists expected 808,000 workers to apply for government unemployment benefits in the week ending December 12.

“Until COVID is better under control, demands will continue to rise,” Thomas Simons, Jefferies money market economist, wrote in a note.

Wall Street had a mixed session with the S&P 500 and the Nasdaq Composite rising while the Dow posted a small loss.

On Wednesday, the Federal Reserve pledged to do its part by continuing to buy bonds until the economic recovery was over. Fed chairman Jerome Powell also said the central bank would increase its bond purchases if the recovery slows.

Gregory Faranello, head of US interest rate trading at AmeriVet Securities, said US monetary policy is likely to remain simple for a while.

“They feel like there are still disinflationary forces around the world to grapple with and they are realistic about their timeframe and their ability to meet their 2% inflation target,” Faranello said. “This is suitable for this topic [rates] stay lower longer. “

– CNBC’s Yun Li contributed to the coverage.

Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.