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U.S. stocks advanced Thursday, capping their best week in more than four decades after the Federal Reserve said it would provide $2.3 trillion in loans to households, local governments and businessesin another effort to shield the economy from the coronavirus pandemic.
The Dow Jones industrial average rose 285.80 points Thursday to close at 23,719.37 in a shortened holiday week. U.S. financial markets will be closed in observance of Good Friday.
The Standard & Poor’s 500 index gained 1.5% to end at 2,789.82. It climbed 12% for the week, its best weekly gain since 1974. The broad index has jumped more than 20% in the past two and a half weeks, driven by massive amounts of aid promised by governments and central banks for the economy and markets.
Federal Reserve Chairman Jerome Powell said Thursday the economy can bounce back once the pandemic is contained and Americans return to work.
“There is every reason to believe that the economic rebound, when it comes, can be robust,” Powell said in a webcast speech to the Brookings Institution. “We entered this turbulent period on a strong economic footing and that should help support the recovery.”
Powell’s comments come as the Fed announced a new $600 billion lending program for midsize businesses in an effort to help thousands of additional firms as part of $2.3 trillion in new funding actions designed to offset the negative impact of the pandemic on the economy.
Under the Main Street Lending Program, the Fed said it will offer loans to companies with up to 10,000 workers and less than $2 5 billion in revenue.
The yield on the 10-year Treasury slipped to 0.73%, from 0.76% late Wednesday.
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Stock futures had briefly turned lower Thursday after another surge in layoffs.
The number of Americans filing claims for unemployment benefits jumped to 6.6 million last week, the Labor Department said Thursday, after a record 10 million people applied for benefits in the previous two weeks because of business shutdowns from the coronavirus.
“Following ten plus years of economic growth, these job losses represent a sea change for the economy, as well as for those individuals who have been affected,” Michael Sheldon, chief investment officer and executive director at investment advisor RDM Financial Group at Hightower, said in a note to clients. “As the damage has mounted, the big question is when will the economy start to re-open for business again.”
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Investors have been reassured recently by signs that coronavirus deaths and infections may be nearing a plateau in some of the world’s hardest-hit areas. The optimism helped to temper concern over increasingly gloomy data on unemployment as companies shutter and shed staff in many parts of the world.
“Sentiment remains volatile, but there are signs that the virus is close to peaking in parts of Europe and the U.S., shutdowns in some countries are set to be gradually lifted in the coming weeks, and enough fiscal and monetary stimulus will be deployed to drive a recovery in growth once the shutdowns end,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note.
The U.S. surpassed 15,000 deaths from the coronavirus as cases continue to increase, while more than 24,000 people have recovered nationwide.
Confirmed cases in the U.S. exceeded 450,000 Thursday. The death toll was nearing 6,000 one week ago, but in the last two days there have been nearly 2,000 deaths, according to the Johns Hopkins University data dashboard.
The U.S. stock market’s fade coincided with another sharp slide for oil. Benchmark U.S. crude oil fell $2.33, or 9.3%, to settle at $22.76. It had been above $28 earlier on the day on speculation that Russia, Saudi Arabia and other big producers may announce a sharp cutback in production following their meeting Thursday.
Demand for energy has withered as economies shut down to slow the spread of the virus, and the world is awash in oil.
In Europe, Germany’s DAX advanced 2.2% while the CAC 40 in France rose 1.4%. Britain’s FTSE 100 picked up 2.9%. Japan’s Nikkei 225 index was nearly unchanged. Hong Kong’s Hang Seng added 1.4% and the Shanghai Composite index gained 0.4%.
Contributing: The Associated Press
Reporters and experts from across the country and the USA TODAY Network help answer America’s most urgent questions about the $2 trillion stimulus package.
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