Stocks rose on Thursday, led by tech shares, as traders kept an eye on Washington for clues on a new coronavirus stimulus package and pored over better-than-expected unemployment data.
The Dow Jones Industrial Average closed 185.46 points higher, or 0.7%, at 27,386.98. The S&P 500 climbed 0.6% to 3,349.16 and the Nasdaq Composite advanced 1% to 11,108.07. Thursday marked the Nasdaq's first close above 11,000 and the index's seventh straight gain. Both the Dow and S&P 500 posted five-day winning streaks. The S&P 500 also closed just 1.3% below its Feb. 19 record.
Facebook jumped more than 6% and Apple shares climbed 3.5%. Netflix advanced 1.4%. Amazon and Microsoft rose 0.6% and 1.6%, respectively. These stocks have contributed a massive share of the broader market's gains off the March 23 low and are all handily outperforming the S&P 500.
"It's a tale of a bifurcated market," said Dryden Pence, chief investment officer at Pence Wealth Management. "You've got a few sectors that are doing well ... and they've left a lot of the rest of the market behind."
Pence said the market is "a bit ahead of itself," but noted he would use a pull as a buying opportunity.
Senate Majority Leader Mitch McConnell told CNBC's "Squawk on the Street" that lawmakers were still at odds over how much stimulus is appropriate. He added that a bill passing the Senate would require liability protections for companies impacted by the pandemic.
In another interview with CNBC's "Squawk on the Street," however, House Speaker Nancy Pelosi took a shot at Republicans and their priorities. She stated: "Perhaps you mistook [Republicans] for somebody who gives a damn." Pelosi added, though, both sides will find a solution to the situation.
"If we don't have a deal, we've got to have a sell-off," CNBC's Jim Cramer said Thursday. "It's not like we can just avoid a deal and say it doesn't matter. And that's what I'm getting concerned about."
The Labor Department said initial jobless claims for the week ending Aug. 1 totaled 1.186 million. That's well below a Dow Jones estimate of 1.423 million and the lowest claims level since the pandemic began.
"The overall tone of the jobless claims data is the best it has been in 3 weeks or so," said Thomas Simons, money market economist at Jefferies, in a note. "The decline is the biggest since the week of June 6, so the data does not have the same sort of 'stalling out' theme that we have seen in recent weeks."
"However, one cannot help but notice the date of the reference week, August 1, which is the day after the $600 per week enhanced benefit provided by the CARES Act expired," Simons said. "So, is the drop this week related to an improvement in the labor market? Or is it related to folks who had some agency in their employment situation electing to collect the benefit rather than return to work now no longer being able to do so?"
The data came a day before the government's monthly nonfarm payrolls report, which is expected to show jobs growth of 1.264 million for July.