By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher on Thursday, focusing on the prospect of a stimulus package from Congress rather than on signs of a further slowdown in the U.S. economy.
The S&P 500 and Nasdaq Composite both hit new record highs against a backdrop of reports suggesting that Congress would pass a package including direct checks to household and a limited enhancement of unemployment benefits to mitigate the effects of the latest wave of the pandemic, which has notched successive records for deaths and hospitalizations over recent days and weeks.
By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was up 152 points, or 0.5% at 30,307 points. The S&P 500 was likewise up 0.5% and the Nasdaq Composite was up 0.7%.
Earlier, the Labor Department had reported that initial jobless claims rose to a new three-month high last week at 885,000, defying expectations for an improvement to 800,000.
The market interpreted the news as likely to focus lawmakers’ minds on completing a stimulus package likely to be worth around $750 billion.
Paul Donovan, chief economist with UBS Global Wealth Management, said the package was essentially an ‘automatic stabilizer’ along European lines, and more to be viewed as an ‘anti-depressant’ than as a stimulant.
Among early movers was home builder Lennar 's (NYSE:LEN) stock, which shot 9.3% higher on the back of a better-than-expected quarterly update that was also buttressed by more strong data from the housing market.
Housing starts rose 1.2% in November to their highest since the pandemic erupted, driven mainly by the construction of multi-family homes. Building permits, meanwhile, rose to their highest in over a decade, as urban professionals continue to look for bigger premises outside of city centers.
Also moving sharply was Rite Aid (NYSE:RAD) stock, which soared 29% after the pharmacy chain reported a much better-than-expected third-quarter profit and said it now expects to be profitable for the full year.
Roku (NASDAQ:ROKU) stock meanwhile rose 6.4% after it resolved a long-running dispute with AT&T Inc (NYSE:T) unit HBO Max over running the latter's content on its streaming devices. The news was followed by a number brokerage upgrades. It means HBO Max will run on its devices from Thursday.
Novavax (NASDAQ:NVAX) stock meanwhile rose 4.5% after it signed a preliminary deal for 200 million doses of its Covid-19 vaccine, pending authorization from the regulators. The Food and Drug Administration is expected to approve Moderna 's vaccine for emergency use after an advisory panel meeting Thursday. Moderna (NASDAQ:MRNA) stock was up 6.5%.