Wall Street manages positive open as US jobless claims fall more than expected

Despite predictions of a mixed start, the main indices on Wall Street were higher on Thursday morning after new data showed a greater than expected fall in US jobless claims last week. Shortly after the opening bell, the Dow Jones Industrial Average was up 0.22% at 29,948, while the S&P 500 rose 0.08% at 3,672 and the Nasdaq climbed 0.34% to 12,391. Market sentiment may have been lifted by the initial jobless claims numbers for the week to November 28, which showed 712,000 Americans filed for unemployment, down from 787,000 the week before and below estimates of 775,000. Continuing claims also fell to 5.52mln from 6.09mln, lower than forecasts of 5.8mln. However, analysts at Pantheon Macroeconomics warned that the fall was likely explained by last week’s Thanksgiving holiday, and that the drop in initial claims “does not refute the idea that the trend is rising”. “Initial claims likely will rebound strongly next week, probably rising above the 800K mark for the first time in eight weeks. Soaring Covid cases and the accompanying tightening of restrictions are hammering the discretionary services sector”, Pantheon said, adding that the lower number of continuing may be a symptom of “people switching from regular state benefits to Pandemic Emergency Unemployment Compensation, which kicks-in when regular benefits run out”. 8.00am: Wall Street heads for tepid start Wall Street seems to be heading for a lukewarm session on Thursday, with the futures pointing at a barely red open for the Dow Jones and the S&P 500 and a barely green open for the Nasdaq. Indices on both sides of the pond have already priced in the positive vaccine news, even after the UK approved the Pfizer/BioNTech jab on Wednesday. US lawmakers are set to enter intense negotiations to finally decide on a relief package, although the deal is likely to be much smaller than Democrats would like, according to OANDA’s Craig Erlam. “With Congress also having to agree a funding bill to avert a partial government shutdown by 11 December, the best chance of a deal may be alongside one another. It won't be perfect but it will see the country through to the new administration, at which point more talks can commence, if needed,” the analyst commented. “The fact that the Democrats are willing to use a bipartisan proposal, amounting to US$908bn, as a starting position is a significant compromise that could be a promising launch point for negotiations. This is a massive concession from the US$2.4 trillion package it had been targeting and may reflect its belief that it will stand more chance of passing something more substantial after January 20,” Erlam added. “Leader of the Senate, Mitch McConnell, has been less open to the bipartisan proposal but is keen to tie any stimulus to the funding bill. While some are enthused by the desire on both sides to get something done before the holiday's, I'm not quite there. The differences remain significant and McConnell may feel emboldened after the election, with the run-off in two Georgia seats still to be decided, which will determine whether Republicans hold the Senate.” Five things to watch for on Thursday: The company results diary is scheduled to see third quarter figures from supermarket giant Kroger Co (NYSE:KR) Also expected are third quarter earnings from variety store chain Dollar General Corp (NYSE:DG) as well as semiconductor maker Marvell Technology Group Ltd (NASDAQ:MRVL) On the macro front, while the non-farm payrolls tomorrow are likely to attract the most attention, Thursday’s initial jobless claims for the week to 28 November will provide some more clarity on the employment situation in the US There may also be some interest in the US service and non-manufacturing PMIs for November Meanwhile, any political developments, particularly regarding the status of stimulus negotiations in Washington DC, may also draw interest after Democratic leaders in the Senate and the House of Representatives backed a package of measures that have garnered bipartisan support