Stocks muted as jobless claims surge 6.6 million

U.S. stocks wavered Thursday after the number of Americans who filed claims for unemployment benefits surged to a record 6.6 million last week as the coronavirus pandemic caused massive layoffs and furloughs across the nation. 

The Dow Jones industrial average rose 70 points, a day after the blue-chip index shed nearly 1,000 points at the start of a new quarter. The Standard & Poor’s 500 ticked up 0.5%.

More people are applying for unemployment insurance as segments of the economy are shutting down in the wake of the outbreak. The 6.6 million jobless claims reported by the Labor Department on Thursday was double the prior week’s total of nearly 3.3 million. 

Investors will monitor monthly jobs data, due Friday, for further indications on how the pandemic has affected the U.S. economy.

“This is eye watering and we are still only at the beginning of the layoffs spurred by the lockdowns throughout the country,” James McCann, senior global economist at Aberdeen Standard Investments, said in a note. “When we look at all the jobs at direct risk from social distancing policies, and those which could be affected indirectly, the numbers start to get pretty scary. Unemployment could well rocket in coming months to more than 10%, comfortably a post-war record.”

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The S&P 500 index is coming off its worst quarter since the financial crisis in 2008, with a 20% loss. Traders say markets will be turbulent until numbers of new cases decline. The number of infections is rising despite anti-disease controls that have shut down much of the global economy.

The U.S. death toll was at 5,138 early Thursday, according to the Johns Hopkins University data dashboard. Worldwide, the virus has killed more than 47,200 and infected nearly 940,000.