Stocks surged for a third straight day Thursday as investors shrugged off the release of record-breaking initial jobless claims while the Senate passed a massive economic stimulus bill amid the coronavirus outbreak.
The Dow Jones Industrial Average jumped more than 1,000 points, or 4.9%. The S&P 500 gained 4.8% while the Nasdaq Composite advanced 4.1%. Those gains put the Dow and S&P 500 on track for a three-day winning streak. They also put the Dow up about 20% over the past three days.
Boeing, Walgreens and Nike drove the Dow’s gains, with each stock rising more than 7%. Utilities and real estate were the best-performing sectors in the S&P 500, both trading more than 5% higher.
An hour before the opening bell, the Labor Department reported that jobless benefit claims had soared to 3.28 million last week, by far a record. That number blew past the Great Recession peak of 665,000 and the all-time mark of 695,000 in October 1982. However, the number was still better than the most dire estimates on Wall Street. Citi, for example, expected a spike to 4 million.
“We all know the pain being felt and the economic damage being caused by this damn virus but because we are so close to getting past the worst of the spread, we need to start getting creative about what the restart will look like,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Thursday’s moves came a day after the Senate unanimously approved a $2 trillion economic relief package in an attempt to cushion the blow from the coronavirus outbreak. The stimulus bill now heads to the House, which will push to pass it by voice vote Friday morning as most representatives are out of Washington.House speaker Nancy Pelosi, D-Calif., said the bill will be passed “with strong bipartisan support.” Stocks hit their session highs following her comment.
The bill includes stimulus checks to be sent to people within three weeks, Treasury Secretary Steven Mnuchin told CNBC on Thursday. “We’re determined to get money in people’s pockets immediately,” Mnuchin said.
“The policymakers deserve a lot of credit,” said Ed Perks, chief investment officer at Franklin Templeton Multi-Asset Solutions. “They’ve tackled some of the real critical systemic issues around the financial system continuing to be able to function while we deal with this crisis.”
The Federal Reserve has also stepped in to shore up the economy. Among other things, the central bank has slashed interest rates to near zero and announced an unprecedented quantitative easing program.
Also before the markets opened, Fed Chairman Jerome Powell said Thursday the central bank will not “run out of ammunition” to keep the economy stable.
“We still have policy room in other dimensions to support the economy,” Powell said on NBC’s “TODAY” show. “We’re trying to create a bridge from a very strong economy to another place of economic strength.”
Thursday’s gain follows the first two-day winning streak since February for the S&P 500 and the Dow. Wednesday’s gains extended Tuesday’s historic rally, which saw the Dow register its best day since 1933 and post its largest single-day point gain in history. Tuesday was the S&P 500’s best day since 2008.
Stocks still have a lot of ground to make up for before returning to record highs. The Dow, S&P 500 and Nasdaq entered Thursday’s session down at least 24.9% from their respective all-time highs set last month.
Legendary trader Paul Tudor Jones, however, thinks stocks will be higher in three-to-five months after a retest of the lows.
“I do think the stock market’s going to find a bottom once we get a peak in the epidemic curve, [there’s] not a doubt in my mind the stock market will rally,” Jones told CNBC’s “Squawk Box” on Thursday.
—CNBC’s Jacob Pramuk contributed reporting.
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