US STOCKS-Wall Street ends lower as investors weigh stimulus hopes and bleak jobs data

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By Sinéad Carew
NEW YORK, Jan 14 (Reuters) - Wall Street closed lower on
Thursday as hopes for fresh fiscal stimulus ahead of
President-elect Joe Biden's pandemic aid proposal were pitted
against a weakening labor market.
The Labor Department's weekly jobless report showed the
number of Americans filing first-time claims for unemployment
benefits increased more than expected last week, underscoring
the impact of a resurgence in COVID-19 infections. While the S&P 500 lost steam toward the end of the day, it
spent must of the session in positive territory as investors
counted on Biden unveiling on Thursday evening a stimulus plan
that could exceed $1.5 trillion. "There's a tug-of-war going on between the prospects for
further fiscal stimulus, as a result of Democratic control of
the Senate, and a jobs market that has a long way to go before
it heals," said Emily Roland, co-chief investment strategist at
John Hancock Investment Management. "You have these competing
forces going on which are keeping markets range bound."
But Roland noted that disappointing jobs data could provide
"further fodder for Biden to potentially market this plan."
"Everybody's waiting to hear the details ... Whether it's $1
trillion or $2 trillion, that's a massive amount of fiscal
stimulus," she said.
Citing two people familiar with the plans, The New York
Times reported that Biden is expected on Thursday to unveil a
$1.9 trillion spending package. Since the S&P had gained steadily ahead of the story Robert
Pavlik, senior portfolio manager at Dakota Wealth in Fairfield,
Connecticut suggested investors were selling on the news.
Investors also seemed reassured after U.S. Federal Reserve
Chair Jerome Powell said an interest rate hike would not be
coming anytime time soon and pushed back against suggestions
that it might taper bond purchases any time soon. Unofficially, the Dow Jones Industrial Average .DJI fell
68.95 points, or 0.22%, to 30,991.52, the S&P 500 .SPX lost
14.3 points, or 0.38%, to 3,795.54 and the Nasdaq Composite
.IXIC dropped 16.31 points, or 0.12%, to 13,112.64.
Of the 11 major S&P sectors, economically-sensitive energy
.SPNY showed the biggest percentage gains as oil prices rose.
The domestically-focused small-cap Russell 2000 .RUT
index, as well as the Dow Jones Transports index .DJT ,
considered a barometer of economic health, both scaled all-time
highs.
Helping the transport index was a rise in shares of Delta
Air Lines DAL.N after Chief Executive Ed Bastian forecast 2021
to be "the year of recovery" after the coronavirus pandemic
prompted its first annual loss in 11 years. The S&P 1500 airlines index .SPCOMAIR also soared.
This was after President Donald Trump became the first
president in U.S. history to be impeached twice when the House
voted 232-197 on Wednesday to charge him with inciting riots at
the Capitol. While some investors worry the impeachment proceedings could
delay stimulus, Max Gokhman, head of asset allocation at Pacific
Life Fund Advisors in Newport Beach, California played down
these fears saying its not going to "derail the further economic
boost that we're going to get from the stimulus," he said.
The Philadelphia semiconductor index .SOX also hit a
record high with a big boost from Taiwan Semiconductor
Manufacturing Co Ltd TSM.N . The chip manufacturer's US shares
jumped after it announced its best-ever quarterly profit and
raised revenue and capital spending estimates. Investors were also waiting for the earnings season to kick
into full swing with results from JPMorgan JPM.N , Citigroup
C.N and Wells Fargo WFC.N slated for Friday.
First-quarter and 2021 corporate guidance will be key for
investors as new lockdowns threaten to push back a recovery in
corporate earnings, according to investment banks.