NEW YORK – Stock markets closed Thursday with gains for the third day in a row after the Senate approved a massive economic aid package against the coronavirus and Wall Street downplayed a historically high unemployment report.
The S&P 500 is up 6.2% and accumulates gains of 17.6% in three days. For its part, the rise in the Dow Jones index has been even more remarkable, at 21.3% since Monday.
Nearly 3.3 million Americans applied for government unemployment support last week, easily beating the previous record set in 1982, as a wave of layoffs and business closings swept across the country.
The market gained ground as Wall Street anticipated bad news about unemployment, analysts said, and the Senate finally approved a $ 2.2 trillion economic aid package, part of a surprising endorsement of the economy by politicians and the Federal Reserve.
“There is no way to sweeten these figures. They are bad, ”said Jamie Cox, partner at Harris Financial Group. “The markets have had several days to digest what we all knew would come; therefore, the market response to these figures may differ from what people might expect. “
Despite strong gains, the S&P 500 remains 22% below its February high and analysts anticipate bad news and market turmoil in the coming days.
Companies are also expected to release disappointing results in a few weeks, when the quarterly earnings reporting season begins. Very few have dared to give forecasts that capture the size of the impact on their earnings from the virus.
The rise in the markets began Tuesday amid expectations that Congress would approve the massive bailout plan, which includes direct payments to families and aid to the worst-affected industries. The House of Representatives is expected to approve it on Friday.
The prospect of a huge financial injection to businesses and families helped offset some of the concerns about the huge job loss the economy is beginning to see as a result of the coronavirus.
The Dow Jones rose 1,351 points, 6.4%, to 22,552.17, while the Nasdaq gained 413.24 whole, 5.6%, and closed at 7,797.54. The S&P 500 advanced 154.51 units and was located at 2,630.07.
These are the dates that taxpayers would receive the expected checks.
Investors still need to see stability in banks, and especially in crude prices, to maintain confidence, as markets could undergo a further decline if crude falls below $ 20 a barrel, Andrew Slimmon said, Account Director at Morgan Stanley Investment Management.
Benchmark US crude lost 7.7% and closed at $ 22.60 a barrel. Goldman Sachs has forecast that it will drop below $ 20 in the next two months as reserves will be at their peak and wells should close.
Yield on 10-year Treasury bonds fell to 0.83% from 0.85% on Wednesday.