U.S. stocks roared higher Thursday, closing up for the third day in a row despite a report from the Labor Department that showed unemployment claims soared to a record 3.28 million last week, as the coronavirus pandemic shut down businesses across the nation.
Investors took some comfort from the overnight passage of a historic $2 trillion economic stimulus bill by the Senate, putting it one step closer to being signed into law to mitigate the economic fallout from the outbreak.
How did benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.47% closed 1,351.62 points, or 6.38%, higher, at 22,552.17, while the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.84% gained 154.51 points, 6.24%, to touch 2,630.07. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.27% was 413.24 points or 5.6%, higher, closing at 7,797.54.
The move for the Dow on Thursday marked its first three days of successive gains since Feb. 6, while for the S&P 500 it was the first such streak since Feb. 12. Over the past three days, the Dow has gained 21.3%, its best three-day stretch since 1931, while the S&P 500 has gained 17.5%, the best three-day streak since 1933, according to Dow Jones Market Data.
For the year to date, the Dow is down about 21%, the S&P 500 is about 18.7% lower, and the technology-heavy Nasdaq is off 13.1%.
What drove the market?
The number of Americans filing for unemployment benefits surged to a record 3.28 million last week as businesses shuttered and laid off workers as part of efforts to slow the spread of the coronavirus, but investors had largely anticipated the data.
Initial jobless claims in the week ended March 21 of 3.28 million were up from 282,000 in the prior week and more than quadruple the previous record weekly new claims of 695,000 in 1982, according to Labor Department figures released Thursday. During the 2008-’09 recession, the highest number of new claims in a week was 655,000. Continuing claims peaked at around 6.6 million in 2009 when overall unemployed numbers rose to about 15 million.
The coronavirus pandemic has infected 510,000 people globally and claimed nearly 23,000 lives, according to data compiled by Johns Hopkins University . In the U.S., nearly 70,000 people have contracted the illness while 1,046 have died.
However, investors were heartened by the Senate late Wednesday which approved a $2 trillion emergency relief package intended to help to mitigate the economic damage that the illness has already wrought on the U.S. economy. The House is expected to vote on the passage of the legislation on Friday and President Donald Trump could sign it into law by Saturday.
In addition, Federal Reserve Chairman Jerome Powell, on a morning talk show, said that Americans should know that the central bank is “working hard to support you now.”
“Investors cheered the impressive global policy response, but today’s data have them knowing the battle is daunting,” said economist David Rosenberg in a morning research note. “Nothing I see is characteristic of normal market behavior and I continue to see too much fragility to turn bullish on risk beyond a trade. Best I can say is that I am less bearish on the immediate post-Q2 economic outlook than I was prior to the vigorous government policy response.”
Still, Rosenberg pointed out, the risk-on attitude on Thursday suggested investors expect greater stimulus ahead.