US: Tech shares lead Wall Street up ahead of jobs data, oil prices fall

[NEW YORK] Tech shares led Wall Street higher Thursday as markets weighed mixed economic data and ongoing talks over fiscal stimulus, while oil prices retreated on worries about weak demand.

Investors took in a deluge of economic reports ahead of Friday's highly anticipated government jobs data, the last before the US presidential election.

Among the releases Thursday, US jobless claims dipped slightly from the prior week, but remained at 837,000, still an extremely elevated level by historic standards.

US car sales in the third quarter from General Motors and other auto giants fell less than expected.

But Commerce Department data showed a drop in personal income of 2.7 percent in August, reflecting a hit from the expiration of US supplemental unemployment benefits.

"The huge decline in household income is a warning that the economy is still heavily dependent on government social welfare payments," said economist Joel Naroff.

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The situation on another big fiscal bill to support the coronavirus-ravaged US economy remained fluid, with lawmakers in Washington attempting to reach a deal.

The S&P 500 gained as much as 1.0 percent shortly after news reports suggested Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi had moved closer to an agreement.

But the gains then ebbed after "follow up reports... indicated that distance remains between both sides," Briefing.com said.

With the House scheduled to go into recess at the end of the week, time for a deal is running out.

In Europe, both London and Paris moved modestly higher, while Frankfurt was dragged down by a sell-off in Bayer shares after the company announced more cost-cutting measures.

Asia began the new trading quarter on a quiet note, with Tokyo closed by a computer glitch and several others exchanges including Hong Kong and Shanghai shut for holidays, though there were healthy gains elsewhere.

OIL TUMBLES

World oil prices fell sharply amid ample supplies and timid demand.

Markets.com analyst Neil Wilson told AFP it "seems to be a general sentiment-driven sell-off based on demand/supply imbalances." The stuttering economic recovery from coronavirus lockdowns in many countries has complicated efforts by oil producers to ensure the market is not oversupplied.

CMC Markets analyst David Madden pointed to OPEC confirming a rise in production in September.

"To make matters worse for the oil market, health concerns are persistent, so that has chipped away at traders' perception of demand," he said.

Meanwhile, the British pound was on a roller coaster as the European Union launched legal action over the UK government's attempt to overturn parts of the Brexit withdrawal agreement.

AFP