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Stocks end higher as markets wait on Washington for more aid

Buildings line Wall Street, in New York.
Buildings line Wall Street, in New York.Mark Lennihan/Associated Press

NEW YORK (AP) — Stock indexes ended higher after another day of back-and-forth trading as Wall Street waits to see if Washington can get past its partisanship to deliver more support for the economy.

The S&P 500 index rose 0.5 percent Thursday, after briefly turning negative, as investors handicapped the chances of a deal to send more cash to Americans, restore jobless benefits for laid-off workers and deliver assistance to airlines and other industries hit particularly hard by the pandemic.

Data released in the morning painted a mixed picture on the economy, which contributed to the market’s sloshing around.

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This is a breaking news update. An earlier version of the story appears below.

US stocks are swinging through another day of back-and-forth trading on Thursday as Wall Street waits to see if Washington can get past its partisanship to deliver more support for the economy.

The S&P 500 was up 0.4 percent in afternoon trading, after briefly turning negative, as investors handicap the chances of a deal to send more cash to Americans, restore jobless benefits for laid-off workers and deliver assistance to airlines and other industries hit particularly hard by the pandemic.

The Dow Jones Industrial Average was up 17 points, less than 0.1 percent, at 27,802, as of 2:38 p.m. Eastern time, and the Nasdaq composite was 1.3 percent higher.

The market was once again moving erratically. The Dow had been up 259 points earlier and down as many as 112. Such moves have become typical recently, with several big shifts in momentum pushing markets around within a day.

Data reports released in the morning painted a mixed picture on the economy, which also added to the market's sloshing around. One indicated the pace of layoffs across the country may have slowed last week, with the number of workers filing for unemployment benefits falling to 837,000 from 873,000. It’s a larger decline than economists expected, though the number remains incredibly high compared with before the pandemic.

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“We’re certainly expecting the employment situation to slowly improve,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “Things seem to be moving in the right direction.”

But other reports showed that personal incomes weakened by more than expected and that growth in the country's manufacturing sector fell short of forecasts.

Other warning signs are also looming for the economy, which has seen some slowdowns recently after the last round of stimulus approved by Congress expired. The Walt Disney Co. and other major companies have announced even more layoffs this week, and the clock is ticking on Washington to offer more support.

The CEO of American Airlines said that it would reverse the furloughs of 19,000 workers if Washington can reach a deal with $25 billion for airlines “over the next few days.” United Airlines told government leaders that it could also undo the furloughs of 13,000 workers. American Airlines climbed 1.8 percent and United Airlines was up 0.6 percent.

Rising and falling hopes for a deal on Capitol Hill sent stocks on a roller-coaster ride Wednesday, much as they have over the last several weeks.

“The market, for lack of really anything else to trade off of, has responded to these headlines on the potential for stimulus,” Wren said.

Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi spoke for 90 minutes on Wednesday, and hopes for an agreement helped send the S&P 500 up as much as 1.7 percent during the day. But after Pelosi said in the afternoon that they still had “areas where we are seeking further clarification,” the index gave up all but 0.1 percent of its gain before resuming momentum at the end of the day.

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The pair have worked effectively together in the past, and they helped drive through the previous economic rescue approved by Congress in March. But the country’s partisan divide has only deepened since then, which has stymied progress on aid that investors say is crucial for the economy. The next election is only about a month away.

The yield on the 10-year Treasury fell to 0.67 percent from 0.69 percent from late Wednesday after giving up earlier gains.

In Asian markets, trading on the Tokyo Stock Exchange was suspended due to a technical failure in its computer systems.

The Tokyo Stock Exchange said it plans for normal trading to resume on Friday. Officials said trading was halted early Thursday because rebooting the huge system after the malfunction would have caused confusion.

TSE President Koichiro Miyahara repeatedly apologized for the disruption to trading on the world’s third largest exchange, where about 70 percent of brokerage trading both by value and volume is by foreigners.

The outage on the exchange eclipsed Japan’s main economic news of the day, the first improvement in manufacturing sentiment in three years, despite the pandemic.

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Trading in stock markets for South Korea, Hong Kong and mainland China was closed for national holidays.

In Europe, Germany’s DAX fell 0.2 percent, and France’s CAC 40 rose 0.4 percent. The FTSE 100 in London rose 0.2 percent.

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AP Business Writer Yuri Kageyama contributed.