U.S. stocks reversed course and were poised to open higher Thursday after the Federal Reserve said it would provide $2.3 trillion in support for the economy, an effort to further combat the economic damage from the coronavirus pandemic.
Futures for the Dow Jones industrial average rose 450 points, while Standard & Poor’s 500 futures gained 1.5%. The broad index has jumped nearly 23% 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.
The Federal Reserve on Thursday 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 coronavirus 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.
U.S. Treasury yields fell Thursday as investors awaited a speech from Federal Reserve Chairman Jerome Powell. The yield on the 10-year Treasury was at 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. “As the damage has mounted, the big question is when will the economy start to re-open for business again.”
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. death toll was nearing 15,000 early Thursday, with more than 430,000 confirmed cases, according to the Johns Hopkins University data dashboard. Worldwide, there are close to 1.5 million confirmed cases and more than 88,500 deaths.
The price of oil rose as major crude-producing countries prepared to discuss output cuts.
Oil prices have been even more volatile than stocks recently as Russia and Saudi Arabia bicker over production levels as demand withers. Oil producers are set to discuss an output cut on Thursday, and an announcement for production cuts to prop up the price of crude is possible.
Benchmark U.S. crude oil rose $1.60 to $26.69 per barrel in electronic trading on the New York Mercantile Exchange early Thursday. It gained $1.46, or 6.2%, to settle at $25.09 a barrel on Wednesday, recovering some of its 9.4% slide from the day before.
In Europe, Germany’s DAX advanced 0.4% while the CAC 40 in France shed 0.4%. Britain’s FTSE 100 picked up 0.7%. 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