US stocks edge higher on vaccine hope, upbeat retail numbers

Investor spirits were running high after government figures showed that retail sales increased more than expected last month – signalling consumer spending, the engine of US growth, is accelerating.

Wall Street's main stock indexes edged higher on Friday on coronavirus vaccine hopes and fresh numbers showing that retail sales got an unexpected boost last month [File: Mike Segar/Reuters]
Wall Street's main stock indexes edged higher on Friday on coronavirus vaccine hopes and fresh numbers showing that retail sales got an unexpected boost last month [File: Mike Segar/Reuters]

The major stock indexes in the United States opened in the green on Friday on stronger-than-expected retail sales figures for September and renewed vaccine hopes after pharmaceutical giant Pfizer said it may apply for emergency use of its COVID-19 vaccine by late November.

Minutes into the New York trading session, the Dow Jones Industrial Average was up more than 165 points or 0.58 percent at 28,659.41

The S&P 500 – a gauge for the health of US retirement and college savings reports – was up 0.44 percent, while the tech-heavy Nasdaq Composite index was up 0.65 percent.

Investors are weighing the possibility of a Democratic “blue wave” victory in the November 3 US elections. If Democratic presidential nominee Joe Biden wins the White House race and Democrats manage to gain control of both Senate and retain control of the House of Representatives, it would increase the chances that Biden’s ambitious spending plans would be enacted – injecting a massive stimulus into the US economy.

Meanwhile, negotiations between the administration of President Donald Trump and Democrats in Congress on a new round of virus relief aid for struggling US businesses and households remain deadlocked.

Trump said on Thursday he is willing to go higher than a $1.8 trillion package his administration floated to Democrats, but hopes are dimming that a deal will be done before the elections.

Trump and Biden will return to the campaign trail with visits to three battleground states. On Thursday night, the two contenders participated in duelling televised town halls, laying out their agendas for the next four years to pull the US economy out of its biggest crisis since the Great Depression.

With a mere 19 days to the presidential election, political tensions continue to grow. And with every passing day of back and forth, it is becoming clearer that Democrats and Republicans are unlikely to yield a deal before Americans take to the polls.

Investors went into Friday’s session buoyed by positive news on the US economy.

US retail sales in September increased by 1.9 percent – more than expected and at the fastest rate since June. The data signals that consumer spending – the engine of the US economy – is accelerating.

But the good news in the pandemic era can turn on a dime. There are myriad signs the economic recovery has downshifted as government aid has run dry.

A man wears a mask as he walks past mannequins wearing masks in a retail shopping area during the outbreak of the coronavirus in Encinitas, California, United States [File: Mike Blake/Reuters]

“As the prospects of an immediate fiscal relief package dim, the risk is growing that declining income and reduced savings buffers will constrain household spending in coming months, especially among the most vulnerable tranches of the population,” economists at Oxford Economics wrote in a Friday note. “The upcoming elections carry upside and downside risks for the economy, but a lapse in income support until 2021 would leave the US consumer quite exposed during the fall and early winter.”

Among stocks making headlines on Friday:

Shares of Pfizer were up 1.85 percent after the drug giant’s CEO posted a letter on the company website saying that the drug giants may know by the end of October whether its COVID-19 vaccine candidate is effective and may apply for Emergency Use Authorization for it in the US by the third week of November.

Shares of Schlumberger were down 5.63 percent after the world’s leading oilfield services provider reported a third straight quarterly loss.

Shares of Boeing Co spiked 3.98 percent after a report said Europe’s aviation watchdog had given the green light for the US planemaker’s 737 MAX to take to the skies again.

Shares of Gilead Sciences Inc lost 0.33 percent after a World Health Organization study concluded its COVID-19 drug remdesivir does not help patients who were undergoing treatment in the hospital.

Source: Al Jazeera


More from Economy
Most Read