US stock index futures were flat overnight on Thursday after major averages closed at new highs.
Futures contracts linked to the Dow Jones Industrial Average gained 5 points. The S&P 500 futures were unchanged while the Nasdaq 100 futures fell 0.04%.
The main averages emerged from a record session in which all three indices closed at new highs. During regular trading hours, the Dow rose 148 points, up 0.49%. The S&P 500 and Nasdaq Composite hit both intraday and record closing highs, gaining 0.58% and 0.84%, respectively.
The leg up was given the optimism about Covid vaccines and hopes that Washington will soon come to a consensus on additional incentive measures.
Leaders on Capitol Hill said they were close to an agreement that would provide $ 900 billion in additional aid. The month-long talks are about to begin, and federal funds will expire on Saturday at 12:01 p.m. CET.
Senate Majority Leader Mitch McConnell, R-Ky., Said Thursday that a “bipartisan, bicameral agreement appears to be at hand”. Noting that it was “very likely” that Congress would work through the weekend, he said lawmakers may need to pass a short-term funding measure to buy enough time to pass legislation.
House spokeswoman Nancy Pelosi, D-Calif., Also said Democrats are nearing consensus. “We made some progress this morning,” and “waiting for feedback,” she told reporters on Thursday.
The surge in stocks on Thursday came despite a surge in Covid cases and disappointing economic data. The number of unemployment claims stood at 885,000 last week, the highest level since early September and above the expected pressure of 808,000. Data released on Wednesday showed that retail sales fell 1.1% in November, above the 0.3% decline expected by economists.
“The bad news this week is that the third wave is getting worse and the economic damage from the pandemic continues to worsen,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “The good news is that policymakers are starting to contain the virus and the federal government is likely to put in place a stimulus package that will mitigate both of the main risk factors.”
McMillan said investors should expect higher volatility in the short term amid developments in the stimulus and vaccines space before the economy returns to growth in 2021. “With vaccines now available and increasing, we are at the end of the start of the pandemic and the markets are realizing that,” he added.
On Thursday evening, Food and Drug Administration advisors overwhelmingly backed Moderna’s Covid vaccine, a major step in FDA approval for public distribution.
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