Stocks Open Higher Brushing Off Record Unemployment Claims
At Thursday’s open, the Dow Jones
Industrial Average gained 2.5%, more than 500 points, while the S&P 500 was
up 1.9% and the Nasdaq Composite gained 1.9%.
Overnight futures trading was choppy, with
Dow futures down more than 400 points at one point overnight and then up 100
points in the final minutes of the session.
Weekly jobless claims surged to a
staggering 3.28 million this week—3 million more than last week and more than
quadruple the previous weekly record of 695,000.
Yields on one-month and three-month U.S.
Treasury bills dropped below zero yesterday for the first time in more than
four years yesterday, signaling that investors are still seeking out safe
assets like fixed-income government debt.
Key background: A massive $2 trillion
economic stimulus package passed in the Senate late Wednesday following six
days of negotiations and two failed votes as the country continues to grapple
with the fallout of coronavirus, which has infected over 69,000 Americans and
ravaged markets. In addition to funding for state and local governments, the
legislation would provide for emergency loans for small businesses, send checks
directly to Americans and support hospitals and medical workers who are short
on equipment. It would also provide a big federal supplement to state
unemployment insurance payments. The House is expected to vote on the bill on
Friday.
“We may well be in a recession, but I would
point to the difference between this and a normal recession. There’s nothing
fundamentally wrong with our economy,” Federal Reserve Chairman Jerome Powell
said on NBC News Thursday morning. “Quite the contrary the economy performed
very well right through February...so we start in a very strong position.”
The New York Stock Exchange closed its
trading floor a little more than a week ago due to concerns about the
coronavirus. Trading is now fully electronic. “I definitely feel very
disconnected from the world and disconnected from the market,” Jonathan
Corpina, Senior Managing Partner at Meridian Equity Partners, told Yahoo
Finance on Monday.
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