US STOCKS-S&P 500 ends lower as investors eye stimulus impasse

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* Walgreens rises on 2021 profit growth forecast
* CBOE volatility index hits one-week high
* Weekly jobless claims unexpectedly rise in latest week

(Updates to close)
By Noel Randewich
Oct 15 (Reuters) - The S&P 500 ended lower on Thursday after
a rise in weekly jobless claims compounded worries about a
stalling economic recovery and fading hopes for more fiscal aid
before the election.
The number of Americans filing new claims for jobless
benefits rose to a two-month high last week, stoking fears the
COVID-19 pandemic was inflicting lasting damage to the labor
market. A separate report showed manufacturing activity in New York
State fell more than expected in October. "Going into the fall it will be difficult for unemployment
to make a lot of positive headway because of the lack of
stimulus," said Christopher C. Grisanti, chief equity
strategist, MAI Capital Management in Cleveland.
U.S. President Donald Trump said he is willing to raise his
offer of $1.8 trillion for a COVID-19 relief deal with Democrats
in Congress, but the idea was shot down by his fellow
Republican, Senate Majority Leader Mitch McConnell. The CBOE volatility index .VIX , investors' fear gauge, hit
a one-week high. The S&P 500 is down about 3% from its Sept. 2
record high close.
With less than 20 days until the Nov. 3 election, Trump and
Democratic challenger Joe Biden are set to hold dueling
prime-time town halls on Thursday instead of their second
presidential debate, which was canceled after Trump declined to
take part in a virtual matchup. "More of what moves the market will be the crystallizing of
who is going to win the presidency, and how close the Senate
races are," said Tom Martin, senior portfolio manager
at Globalt Investments in Atlanta.
A Biden presidency, coupled with a Democratic Senate, would
likely mean a larger fiscal stimulus plan than what a
Republicans Senate would agree to. However, Biden is also widely
seen on Wall Street as likely to raise taxes.
Supporting the Dow Jones Industrial Average, Walgreens Boots
Alliance Inc WBA.O surged as the drugstore chain forecast
single-digit profit growth in 2021 after reporting a
better-than-expected fourth-quarter profit. Focus is also on the quarterly results for corporate
America, with expectations for third-quarter earnings improving
to an 19% drop from a 25% tumble forecast on July 1, according
to Refinitiv IBES data.
Unofficially, the Dow Jones Industrial Average .DJI fell
18.02 points, or 0.06%, to 28,495.98, the S&P 500 .SPX lost
5.32 points, or 0.15%, to 3,483.35 and the Nasdaq Composite
.IXIC dropped 54.86 points, or 0.47%, to 11,713.87.
Morgan Stanley MS.N rose after it beat third-quarter
profit estimates, winding up mixed results from major U.S.
lenders. Recent bank earnings reports saw those focused on
trading clocking big gains, while retail banks took a hit from
the COVID-19 pandemic. The S&P 500 financials index .SPSY climbed, while
communication services .SPLRCL was among the worst performers.
The S&P 1500 airlines index .SPCOMAIR dipped after United
Airlines UAL.O reported a 78% drop in quarterly revenue.
Shares of Vertex Pharmaceuticals Inc VRTX.O lost close to
a fifth of their value after the drug developer discontinued its
trial of a protein deficiency disorder treatment.