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US stock indices reported a decline at the close of Thursday's trading session. Market participants were eagerly waiting for detailed information on how the administration of President-elect Joe Biden plans to stimulate the US economy hit by the COVID-19 pandemic. Many investors were hoping for additional stimulus measures to help it cope with the damage caused by the coronavirus.
The signs of a weakening labor market are another factor that affected the pessimistic mood of market participants. According to the US Department of Labor report, the number of applications for unemployment benefits rose to 965,000 from January 3-9, while analysts' preliminary forecasts only showed 795,000.
It became clear that the US economy still needed help. But since Democrats now control the White House and Congress, there are more opportunities to implement large-scale stimulus programs. In turn, they will be able to support the stock market in the short term.
As a result of Thursday's trading, the Dow Jones Industrial Average fell by 0.2%, that was, 30991.52 points. It was followed by S&P 500, which also declined by 0.4% (3795.54 points), and the Nasdaq Composite by 0.1%, namely 13112, 64 points.
During the trading session, all three leading indicators showed steady growth, but they unexpectedly began to lose their gained positions just before its closing.
The clear favorites of trading on Thursday were shares of small-cap companies. It is difficult to call this current condition unexpected, since such enterprises are most sensitive to changes in the economy and have high hopes for the new incentive program.
For example, the Russell 2000 Index, which includes small-cap companies, rose impressively by 2.1%. The Pan-European Stoxx Europe 600 Index is also up 0.7%.
The energy sector was the leader of growth among the S&P 500 industry sub-indices, which grew on the back of rising oil prices.
The corporate reporting season beginning in the United States has slowly come forth for investors.
Delta Air Lines shares also rose by 2.5%. Delta's CEO, Ed Bastian, believes that the company will recover this 2021 from its first annual loss in 11 years.
Taiwan Semiconductor Manufacturing Co Ltd grew by 6.1% on record quarterly earnings.
Today, Wall Street banks JPMorgan, Citigroup and Wells Fargo are expected to publish their fourth-quarter financials.
Assessing the trading results in the Asia-Pacific markets, the main indicator of the Shanghai Composite declined by 0.9%. Experts attribute this to a reduction in China's export growth in December compared to November. Most of the other leading Asian indices increased – Hong Kong's Hang Seng and Japan's Nikkei gained 0.9% each.
On another note, Joe Biden already announced the details of the stimulus after the close of the US trading session. The plan provides for the provision of $1.9 trillion of budget funds (including about $1 trillion for direct payments to citizens), although it was previously planned that the program volume would be around $1.5 trillion.
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