U.S. stocks finished the holiday-shortened week sharply higher Thursday, with the main indexes recovering about half of their losses that were racked up in late March during the height of fears about the impact of COVID-19.
Investors appeared to shrug off another 6.6 million jobless claims, and a wild ride in the energy sector, to focus on the Federal Reserve’s announcement of new efforts to help fix parts of the financial market and economy debilitated by the coronavirus shutdowns.
U.S. exchanges on Friday will be closed in observance of Good Friday, and those in Europe will also be closed for Easter Monday.
How did indexes perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.10% gained 285.80 points, or 1.2%, to close at 23,719.37, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.34% jumped 39.84 points or 1.5% to end at 2,789.82. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.37% advanced 62.67 points to trade near 8,153.58, a 0.8% gain.
For the week, the Dow rose 12.67%, the S&P 500 notched a 12.1% gain for the abbreviated week, marking its best weekly gain since 1974, and the Nasdaq rose 10.59%, according to Dow Jones Market Data.
From its recent March 23 low, the Dow is up 25.01%, the S&P 500 is up 22.27% from that point and the Nasdaq is up 18.20%, according to FactSet data.
What’s driving the market?
Fed assistance trumped deepening job losses in the U.S. due to the coronavirus pandemic, helping bolster the buying mood on Wall Street in the final session of the abbreviated week.
Another 6.6 million Americans filed for unemployment in the week ending April 4, topping expectations for 6 million new filings, and claims from two weeks ago were raised, painting a stark picture of the economic toll taken by the coronavirus outbreak.
On Thursday, the Federal Reserve also announced details of its new Main Street Lending program and will provide $600 billion support for midsize businesses and $500 billion for states, counties and cities.
“Stocks are up because the damage to the economy — evident in claims — is beyond comprehension, while the response of the Fed is easier to understand,” said Chris Low, chief economist for FHN Financial.
In a webcast appearance, Fed Chairman Jerome Powell said the economy is strong enough to be “robust” once the cloud of the coronavirus pandemic is past. High unemployment can be temporary, he said.
Markets this week have been buttressed by signs of a slowdown in the number of hospitalizations and intensive-care admissions in New York and Europe, and the hope that the economy may soon be reopened.
The decline in the number of new infections has provided some hope to bulls that the worst of the disease may be over, but experts have advocated patience in dealing with the coronavirus that spread from China in January and has infected 1.5 million people and claimed more than 89,000 lives worldwide, according to data from Johns Hopkins University.
A number of analysts also have been skeptical of the recent bullishness in the market, suggesting that stocks have recovered too far too fast and seem likely to retest lows put in on March 23.