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.”
Contact you mortgage lender:Payments may be deferred as coronavirus pandemic causes worker hardships
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.”
Global stock prices have swung wildly as business shutdowns spread around the world. Investors say they need to see a decline in numbers of new coronavirus infections before prices can bottom out.
Confirmed cases in America closed in on 70,000, with more confirmations expected as the U.S. ramps up testing. The global death toll was more than 21,000, with total confirmed cases approaching 500,000, according to the Johns Hopkins University data dashboard.
Federal Reserve Chairman Jerome Powell pledged Thursday that the central bank will continue to provide capital to businesses to help combat the economic damage from the virus.
“When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen,” Powell told NBC. “We still have policy room in other dimensions to support the economy.”
In commodities, benchmark U.S. crude lost 57 cents to $23.92 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents on Wednesday to close at $24.49. Brent crude, used to price international oils, declined 37 cents to $29.62 per barrel in London. It rose 24 cents the previous session to $29.99 a barrel.
In Europe, London’s FTSE 100 lost 1.5% and Frankfurt’s DAX shed 2%. The CAC 40 in France retreated 1.9%. In Asia, the Nikkei 225 in Tokyo declined 4.5% while Hong Kong’s Hang Seng shed 0.7%. The Shanghai Composite Index declined 0.6%.
Contributing: The Associated Press