Stocks rise sharply on Wall Street
NEW YORK — Stocks marched higher on Wall Street Thursday, putting the market on track for its first three-day rally in six weeks, even as the astonishing scale of the downturn slamming the economy because of the coronavirus becomes more apparent.
Nearly 3.3 million Americans applied for unemployment benefits last week, easily shattering the prior record set in 1982, as layoffs and business shutdowns sweep across the country. The outbreak has happened so suddenly that Thursday's jobless report is one of the first points of data showing how much economic pain it's creating.
The S P 500 was up 4%, continuing a rally that has vaulted the index 15% higher since Monday on rising expectations that Congress will soon approve an unprecedented rescue package for the economy. Both Capitol Hill and the Federal Reserve are promising an astonishing amount of aid for the economy and markets, hoping to support them as the outbreak causes more businesses to shut down by the day.
Late Wednesday, the Senate unanimously approved the 2.2 trillion plan, which includes direct payments to U.S.
households and aid to hardhit industries. The House of Representatives is expected to
approve it )riday.
futures for stocks and yields cut their losses immediately after the jobless claims report was released in the morning, which was before 8.6. stock trading opened. 0ost traders likely expected an extreme number from the jobless report, analysts said.
“There is no sugar coating these numbers--they are bad,” said -amie Cox, managing partner for Harris )inancial *roup. “0arkets have had several days to digest what everyone knew was coming therefore, the market response to these numbers may differ than what people might expect.”
Investors still need to see stability in banks and, especially, in oil prices to maintain confidence, because markets could be in for another slide if oil goes below 20 a barrel, said Andrew 6limmon, managing director and senior
portfolio manager at 0organ 6tanley Investment 0anagement.
%enchmark 8.6. oil slid 7.7% to settle at 22.60 a barrel. *oldman 6achs has forecast that it will fall well below
20 a barrel in the next two months because storage will be filled to the brim and wells will have to be shut in.
“I wouldn’t necessarily say that where the market was yesterday we won’t see that again,” 6limmon said. “There is bad news still to come.”
Investors say the market need three main things to slow its breathtaking drop, which has sliced one quarter off the 6 3 500 since it set its record last month.
The first is already here after the )ederal Reserve has slashed interest rates back to nearly zero and offered to buy an unlimited amount of Treasurys to get lending markets running more smoothly. The
second is making progress, as the economic rescue plan moves through Capitol HIll.
The third, though, is getting more concerning by the day the accelerating spread of the virus.
The 8nited 6tates has more than 6 ,000 known cases, and the worldwide number of infections has topped a half-million, according to -ohns Hopkins 8niversity. The death toll has climbed to more than 23,000, while more than 120,000 have recovered.
)or most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. )or some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death
The yield on the 10-year Treasury fell to 0.82% from 0.85% late Wednesday. It had
been as low as 0.77% just before the jobless report was released. Lower yields reflect dimmer expectations for economic growth and greater demand for low-risk assets.
%oeing continued to climb after soaring more than 24% Wednesday in part on expectations that it stands to gain from the Congressional aid package. The aircraft manufacturer was the biggest gainer in the 'ow -ones Industrial Average, rising up 14%.
The 'ow was also adding to its gains this week. It was up 4.2%, or 888 points. The Nasdaq was up 3.7%.
European markets closed broadly higher following a mixed finish for Asian markets.
'espite the solid rally this week, analysts say further big drops are common until there have been enough sustained gains in the market to ease investors’ fear of further declines.
“Historically, you do test the bottom one, two, three times before you’re convinced it’s over and then you build up again toward that viable rally,” said 4uincy .rosby, chief market strategist at 3rudential )inancial. “What you have here, obviously, is a concern about how deep the recession is going to be and when are we going to come out.”