NEW YORK (Reuters) – U.S. stocks gained ground on Thursday after oscillating for much of the session as growing optimism about an imminent U.S. coronavirus relief deal helped offset concern about a global surge in COVID-19 cases. All three major U.S. stock indexes closed higher and long-dated Treasury yields rose on news of two opposing sides in Washington nearing agreement on a new fiscal aid package. “There’s a lot of volatility in the market,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “If Mnuchin and Pelosi come out this evening and say ‘we’re not talking any more’ and the market will sell off.” Amid talks with Treasury Secretary Steven Mnuchin, House of Representatives Speaker Nancy Pelosi, a Democrat, said negotiations were progressing and that legislation could be hammered out “pretty soon.” While a White House spokesman added a further note of optimism, saying “this is really the most optimistic we’ve felt about getting a deal,” President Donald Trump’s economic adviser Larry Kudlow said “significant policy differences” remain. “There are some positive signs that maybe we’ll get stimulus reasonably soon,” Tuz added. “I think we’ll see some kind of deal between now and sometime next week.” The United States was on the brink of a widespread coronavirus outbreak, with nearly two-thirds of states in a danger zone and six, including election battleground Wisconsin, reported a record one-day increase in COVID-19 deaths on Wednesday. U.S. economic data surprised to the upside, as jobless claims fell more than expected and existing home sales blew past estimates to more than a 14-year high. t record increases.
Long-dated Treasury yields hit four-month highs and the yield curve steepened on news of progressing pandemic relief talks. Benchmark 10-year yields hit their highest since early June. Benchmark 10-year notes last fell 14/32 in price to yield 0.863%, from 0.816% late on Wednesday. The 30-year bond last fell 35/32 in price to yield 1.677%, versus 1.629% late on Wednesday.
Ongoing uncertainties surrounding the timing and size of a U.S. pandemic aid package helped the dollar edge up from a seven-week low against a basket of world currencies.