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Wall Street hits one-month high as Trump signals stimulus progress

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(Reuters) – Wall Street’s main indexes rose to a one-month high on Thursday as U.S. President Donald Trump signaled progress in negotiations around new fiscal stimulus, while data showed a recovery in the labor market struggled to gain momentum.

FILE PHOTO: A worker cleans the floor of the New York Stock Exchange (NYSE) , U.S., March 20, 2020. REUTERS/Lucas Jackson/File Photo

Two days after calling off talks on a comprehensive fiscal aid bill, Trump said some discussions were ongoing with Democrats about boosting support for U.S. airlines and providing Americans with $1,200 stimulus checks.

But House Speaker Nancy Pelosi said there would be no additional federal aid for U.S. airlines without a more comprehensive COVID-19 relief package, adding that she was hopeful for a larger deal “because it has to be done.”

All the 11 major S&P indexes were up, with the energy sector .SPNY tracking a jump in oil prices.

Still, gains were largely led by the real estate .SPLRCR and utilities .SPLRCU sectors – both considered defensive plays. U.S. Treasury prices also edged higher, suggesting a cautious mood across financial markets.

“The important point is that we need to step back and realize: we need more (stimulus). This economy is still in really bad shape,” said John Porter, head of equities at Mellon in Boston, Massachusetts.

Data on Thursday showed the number of Americans filing new claims for jobless benefits drifted lower last week but signaled the labor market was making little headway in getting millions of people back on the job after being out of work due to COVID-19 disruptions.

Doubts about more fiscal aid and signs of a slowing domestic economic rebound halted a five-month gaining streak on Wall Street in September, but the main indexes have since recovered, partly as investors begin to digest the prospect of Democratic presidential nominee Joe Biden winning the Nov. 3 election.

Biden appeared to lead Trump among likely voters in Florida and the two were locked in a tight race in Arizona, according to Reuters/Ipsos opinion polls released on Wednesday.

“Some sort of a blue wave is what investors are increasingly expecting as an outcome and they’re trying to figure out what that means for the market,” Porter said.

Meanwhile, with less than a month left for the election, Trump rejected plans for a virtual debate on Oct. 15 with Biden, a format switch intended to reduce the risk of spreading COVID-19 in light of Trump’s infection.

By 11:15 a.m. ET, the Dow Jones Industrial Average .DJI was up 0.40%, the S&P 500 .SPX was up 0.68% and the Nasdaq Composite .IXIC was up 0.60%.

In company news, Coty Inc COTY.N jumped 9.9% after the cosmetics maker announced the launch of direct-to-consumer websites for Kylie Skin brand in the UK, France, Germany and Australia.

International Business Machines Corp IBM.N rose 6.8% after saying it was splitting itself into two public companies, capping its years-long effort to diversify away from its legacy businesses to focus on high-margin cloud computing.

Eaton Vance Corp EV.N surged 47.9% and was on course for its best day ever after Morgan Stanley MS.N agreed to buy the asset management firm for about $7 billion in a cash-and-stock deal. Shares of Morgan Stanley gained 1.2%.

Advancing issues outnumbered decliners 4.14-to-1 on the NYSE and 2.27-to-1 on the Nasdaq.

The S&P index recorded 52 new 52-week highs and no new low, while the Nasdaq recorded 97 new highs and seven new lows.

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