By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Thursday, continuing the recent strong rally as confidence grows about the economic recovery with another Covid relief package likely and the Federal Reserve remaining very accommodative.
The Dow Jones Industrial Average and the S&P 500 cash index are on course for their third positive week in four and the Nasdaq Composite its fourth weekly gain in five, closing Wednesday at another record high.
U.S. lawmakers appear to be closing in on a $900 billion coronavirus relief deal to help boost the country’s economy with the recent surge in Covid-19 cases causing many businesses to shut down again.
“We made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities,” Senate Majority Leader Mitch McConnell said Wednesday, after prolonged negotiations between the congressional leaders of both parties.
The legislation is expected to include $600 to $700 stimulus checks, extend unemployment benefits, help pay for vaccine distribution and to also assist small businesses.
The Federal Reserve, for its part, promised on Wednesday to continue its bond-buying program until “substantial further progress” has been made in restoring full employment and hitting its 2% inflation target.
The Covid-19 continued to claim victims throughout the country, with Wednesday seeing the highest number of new cases, 244,365, as well as a record number of deaths, 3,607, nearly 500 more than the previous high.
Vice President Mike Pence and President-elect Joe Biden are set to get the vaccine in the coming days to try and boost public support, while French President Emmanuel Macron became the latest high-profile person to test positive for the virus.
In the corporate sector, quarterly earnings are expected from FedEx Corporation (NYSE: FDX ), which must be enjoying the holiday shipping rush, as well as pharmacy retailing giant Rite Aid (NYSE: RAD ) Corporation and food retailer General Mills (NYSE: GIS ).
Oil prices surged Thursday, hitting a nine month-high after government data showed a fall in official U.S. oil inventories of 3.1 million barrels last week, suggesting demand remained resilient despite the surge in Covid-19 cases.
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