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Stocks jump even as jobless claims surge to record 3.3 million

U.S. stocks jumped Thursday even as data revealed a record 3.3 million Americans filed for unemployment benefits last week following a wave of layoffs from the coronavirus pandemic. 

The Dow Jones industrial average rose 300 points, a day after the blue-chip average notched back-to-back gains for the first time since February in anticipation of fiscal stimulus from Congress.

Initial claims for state unemployment benefits, a key barometer for layoffs, surged to a seasonally adjusted 3.3 million last week, the Labor Department said Thursday. That marked the highest level of claims in history.

The data offers investors clues into the duration and severity of how the deadly virus is impacting the U.S. economy. 

“Last week provided our first indication of just how severe the shutdown of the U.S. economy could be, as Americans combat the ongoing spread of the coronavirus,” Mike Fratantoni, chief economist and senior vice president of research at Mortgage Bankers Association, said in a note. “These layoffs will lead to real hardships for millions of households across the country.”

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Traders works after the opening bell at the New York Stock Exchange (NYSE) on Wall Street, August 1, 2019, in New York City.

The data comes after the Senate approved aid late Wednesday to blunt the impact of business shutdowns due to the coronavirus that has killed more than 21,000 people worldwide. The measure goes to the House, which is expected to approve it.

“The stimulus package is needed as soon as possible because there are people out of work and there are industries that have been completely damaged,” says Michael Lackwood, founding principal of New York-based Spring Delta Asset Management. “Without any kind of assistance, those businesses will be crippled.”

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