(Reuters) - Wall Street's main indexes rose on the first day of the fourth quarter on Thursday as investors bet on more fiscal stimulus after data showed a recovery in the labor market was slowing.
The number of Americans filing for jobless benefits fell to 837,000 in the week ended Sept. 26, but claims could rise again over the next few weeks as businesses cut more jobs to ride out the recession.
Nine of the 11 major S&P sectors were trading higher after the Trump administration proposed a new stimulus bill to House Democrats worth more than $1.5 trillion, which includes a $20 billion extension in aid for the battered airline industry.
Shares of American Airlines Group Inc (O:AAL), Delta Air Lines Inc (N:DAL), United Airlines Holdings Inc (O:UAL) and JetBlue Airways Corp (O:JBLU) rose between 0.7% and 2.1%.
"Markets are fairly optimistic this morning about the potential for that stimulus package," said Chad Oviatt, director of investment management for Huntington Private Bank in Columbus, Ohio.
"They are looking for a deal to be done (but) the question becomes, is it just posturing or there is actually a deal in the works?"
Aggressive monetary and fiscal stimulus as well as a rally in tech-related stocks powered a Wall Street rebound since a coronavirus-driven crash in March, but the S&P 500 posted monthly declines in September as economic data pointed at a choppy rebound from a deep recession.
Figures on Thursday showed personal income dropped in August, while domestic manufacturing activity unexpectedly slowed in September.
Gains on Thursday were led by tech-related heavyweights including Apple Inc (O:AAPL), Microsoft Corp (O:MSFT), Tesla Inc (O:TSLA) and Nvidia Corp (O:NVDA), which investors perceive as relatively safe at a time of heightened economic uncertainty.
On the other hand, energy stocks (SPNY) tumbled another 2.7% after a 20% decline in the third quarter.
With the presidential election now less than five weeks away, analysts have warned of higher volatility over the next few weeks.
"Volatility is going to come back in a big way, as opposed to the second quarter, when we were able to just forget everything and pile money into the market," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
At 11:49 a.m. ET, the Dow Jones Industrial Average (DJI) was up 102.33 points, or 0.37%, at 27,884.03, the S&P 500 (SPX) was up 18.85 points, or 0.56%, at 3,381.85, and the Nasdaq Composite (IXIC) was up 116.10 points, or 1.04%, at 11,283.60.
Boeing Co (N:BA) rose 1.8% a day after Federal Aviation Administration Chief Steve Dickson conducted a 737 MAX test flight, a milestone for the jet to win approval to resume flying after two fatal crashes.
U.S.-listed shares of French-Italian chipmaker STMicroelectronics (N:STM) jumped 7.6% after it saw a sharp rise in automotive and microcontrollers demand in the third quarter, setting it on course to top its 2020 forecast.
Advancing issues outnumbered decliners 1.73-to-1 on the NYSE and 1.28-to-1 on the Nasdaq.
The S&P index recorded nice new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and 30 new lows.