US stocks have jumped for a third day in a row after a $2 trillion rescue bill was passed by the Senate and unemployment figures rose to 3.3 million as the coronavirus pandemic continues to cripple the economy.
The major indexes were up more than 2 percent in early trading on Thursday, following their first back-to-back gains since a dramatic sell-off took hold of markets five weeks ago.
The Dow rose 500 points (2 percent) at opening, while the S&P 500 and Nasdaq gained more than 1.5 percent.
The gains came soon after Labor Department released its employment figures showing jobless claims had increased by 3 million last week as strict measures to contain the coronavirus pandemic ground the country to a sudden halt.
The Dow rose 500 points (2 percent) on Thursday when markets opened, while the S&P 500 and Nasdaq gained more than 1.5%
Investors were relieved that a massive surge in unemployment applications, despite busting records at 3.3 million, fell short of the worst forecasts.
The outbreak has happened so suddenly that the jobless report is one of the first points of data showing how much economic pain it´s creating.
The Dow was down nearly 500 points just before the jobless claims number was released but rebounded at opening.
The stock market notched its first back-to-back gains on Tuesday and Wednesday on optimism surrounding actions by the Federal Reserve to support credit markets and the approval in the Senate of a $2.2 trillion economic aid package.
Federal Reserve Chairman Jerome Powell said earlier on Thursday they would provide essentially unlimited lending to support the economy as long as it is damaged by the viral outbreak.
In a rare interview on NBC’s Today on Thursday, the Fed chair said the bank’s efforts are focused on helping the economy recover quickly once the threat from the virus has passed.
When asked if the Fed would run out of ammunition to support the economy, Powell said no.
‘When it comes to this lending, we’re not going to run out of ammunition. That doesn’t happen,’ he said.
Federal Reserve Chairman Jerome Powell said on Thursday they would provide essentially unlimited lending to support the economy as long as it is damaged by the coronavirus outbreak
The Labor Department released its employment figures on Thursday showing jobless claims had increased by 3 million last week as strict measures to contain the coronavirus pandemic ground the country to a sudden halt
Still, the Fed chair said the economy’s path is largely dependent on the length and severity of the viral outbreak. The Fed’s policies will likely have their greatest impact when the economy does start to rebound, which he said could happen in the second half.
‘We know that economic activity will decline probably substantially in the second quarter… It will really depend on the spread of the virus. The virus is going to dictate the timetable here,’ he said.
‘When the economy begins to rebound, then we’ll be there to make sure that rebound is as strong as possible.’
Powell also acknowledged that the economy ‘may well be’ in a recession, but said that this is a unique downturn in that it was caused by efforts to control the disease.
He said the economy itself was strong before the outbreak began.
‘If we get the virus spread under control fairly quickly, then economic activity can resume, and we want to make that rebound as vigorous as possible,’ Powell said.
The yield on the 10-year Treasury fell to 0.81% 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
Source: dailymail US