Asia shares mixed in thin holiday trading after Wall St gain

Asian shares were mixed Friday in thin holiday trading, with markets in South Korea, Shanghai and Hong Kong closed.

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The Nikkei 225 index shed strong early gains to edge 0.1% higher, to 23,211.35, as the Tokyo Stock Exchange resumed trading after an all day outage Thursday due to a technical failure.

Reports that the Japanese government is preparing new stimulus measures to help the economy recover from a prolonged downturn worsened by the coronavirus pandemic provided only a temporary lift.

Australia’s benchmark S&P/ASX 200 slipped 0.8% to 5,85.80 after the release of discouraging retail sales data. Shares in Singapore and Indonesia also fell.

On Wall Street, stocks closed higher after pinballing through another shaky day of trading, as investors wait to see if Washington can get past its partisanship to deliver another economic rescue package.

The S&P 500 ended the day 0.5% higher, at 3,380.80, but it careened from an early 1% gain to a slight loss before arriving there.

The Dow Jones Industrial Average rose 0.1% to 27,816.90 after earlier bouncing between a gain of 259 points and a loss of 112. The Nasdaq composite rose 1.4%, to 11,326.51 as big tech-oriented stocks propped up the market, much as they have through the pandemic.

Such big swings have become typical recently, as investors handicap the chances of a deal on Capitol Hill to send more cash to Americans, restore jobless benefits for laid-off workers and deliver assistance to airlines and other industries hit particularly hard by the pandemic.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued their talks on Thursday, but no breakthrough arrived before stock trading ended on Wall Street. Instead, there were only hopes that were periodically raised and dashed as government officials took turns criticizing each other.

“Things remain fluid; we all know what is at stake if this deal does not go through before markets sundown, it is unlikely to be pretty ugly," Stephen Innes of Axi said in a commentary.

Data reports released in the morning painted a mixed picture on the economy, further roiling the mood.

One indicated the pace of layoffs across the country may have slowed last week, with the number of workers filing for unemployment benefits falling to 837,000 from 873,000. It’s a larger decline than economists expected, though the number remains incredibly high compared with before the pandemic.

“We’re certainly expecting the employment situation to slowly improve,” Wren said. “Things seem to be moving in the right direction.”

Consumer spending also strengthened by more than expected in August, which is key because it’s the main driver of the U.S. economy. But other reports were more discouraging. Personal incomes weakened by more than expected last month, and growth in the country's manufacturing sector also fell short of forecasts.

Other warning signs are looming for the economy, which has seen some slowdowns recently after the last round of stimulus approved by Congress expired. The Walt Disney Co. and other major companies have announced even more layoffs this week, and the clock is ticking on Washington to offer more support.

The CEO of American Airlines said that it would reverse the furloughs of 19,000 workers if Washington can reach a deal with $25 billion for airlines “over the next few days.” United Airlines told government leaders that it could also undo the furloughs of 13,000 workers.

United Airline's stock gained 1.2%, and American Airlines shares rose 2.4%, but only after a turbulent day of ups and downs.

Continued strength for Big Tech stocks helped to lift the market. Amazon, Microsoft, Apple, Netflix, Facebook and Google's parent company alone accounted for the bulk of the S&P 500's gain.

Investors say another round of economic aid from Congress is crucial given the slowdowns already seen. Mnuchin and Pelosi have worked effectively together in the past, and they helped drive through the previous economic rescue approved by Congress in March. But the country’s partisan divide has only deepened since then, which has stymied progress. The next election is only about a month away.

The yield on the 10-year Treasury rose to 0.68% from 0.67% late Thursday.

In other trading, U.S. benchmark crude lost 43 cents to $38.29 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.50 to $38.72 on Thursday. Brent crude, the international standard, lost 45 cents to $40.48 per barrel.

The dollar strengthened to 105.59 Japanese yen from 105.54 yen. The euro weakened to $1.1730 from $1.1747.