Stocks rise amid investors’ tug of war between hope, fear

U.S. stock indexes are modestly higher Thursday as Wall Street’s tug of war continues between worries about the worsening pandemic in the present and optimism that a vaccine will rescue the economy in the future.

The S&P 500 was up 0.3% in afternoon trading after spending much of the day flipping between small losses and gains. It follows up on a 1.2% slide from the day before, as the benchmark index backed away from its record of 3,626.91 set on Monday.

The Dow Jones Industrial Average was headed higher after having been down most of the day. It was up 10 points, or less than 0.1%, at 29,499 as of 3:21 p.m. Eastern time, and the Nasdaq composite was 0.8% higher.

Despite the afternoon burst of buying, the S&P 500 is still on track for its first weekly decline in three weeks. Wall Street’s huge November rally has slowed this week as fears about the economy buckling in the near term collide with hopes that stronger growth will arrive next year once effective coronavirus vaccines become available. A discouraging report on Thursday underscored the fears, showing that more U.S. workers filed for unemployment benefits last week than the week before. It was a worse number than economists expected and the first increase in five weeks.

With infections and hospitalizations on the rise across much of the country, governors and mayors are grudgingly issuing mask mandates, limiting the size of gatherings, banning indoor restaurant dining, closing gyms and restricting the hours and capacity of other businesses.

“Good vaccine news is battling worsening coronavirus trends,” said Ross Mayfield, investment strategist at Baird. “We’re at this point where you have the endgame in sight, but the path to get there looks really murky.”

Investors worry the moves and the worsening pandemic that caused them will hurt...