Stocks traded sharply higher on Thursday even after the release of record-breaking initial jobless claims sparked by the coronavirus pandemic.
The Dow Jones Industrial Average jumped 900 points, or more than 4%. The S&P 500 gained 4.1% while the Nasdaq Composite advanced 3.4%. Those gains put the Dow and S&P 500 on track for a three-day winning streak.
Boeing, American Express and Coca-Cola drove the Dow’s gains, rising at least 7.4%. Utilities and financials were the best-performing sectors in the S&P 500 as the both traded more than 4% higher.
The Labor Department said Thursday unemployment benefit claims soared to 3.28 million last week, a record. That number blew past the Great Recession peak of 695,000. However, the record-setting number was still better than some of the most dire estimates on Wall Street. Citi, for example, expected a spike to 4 million.
“We all know the pain being felt and the economic damage being caused by this damn virus but because we are so close to getting past the worst of the spread, we need to start getting creative about what the restart will look like,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Thursday’s moves came as the Senate unanimously approved a $2 trillion economic relief package late Wednesday, which aims to cushion the blow from the coronavirus outbreak. The stimulus bill now heads to the House, which will push to pass it by voice vote Friday morning as most representatives are out of Washington.
The bill includes stimulus checks sent to people in the U.S. Treasury Secretary Steven Mnuchin told CNBC on Thursday those checks will start rolling out within three weeks. “We’re determined to get money in people’s pockets immediately. That will be within three weeks,” Mnuchin said.
“The policymakers deserve a lot of credit,” said Ed Perks, chief investment officer at Franklin Templeton Multi-Asset Solutions. “They’ve tackled some of the real critical systemic issues around the financial system continuing to be able to function while we deal with this crisis.”
The Federal Reserve has also stepped in to shore up the economy. Among other things, the central bank has slashed interest rates to near zero and announced an unprecedented quantitative easing program.
Fed Chairman Jerome Powell said the central bank will not “run out of ammunition” to keep the economy stable.
“We still have policy room in other dimensions to support the economy,” Powell said Thursday on the “Today” show. “We’re trying to create a bridge from a very strong economy to another place of economic strength.”
Thursday’s gain follows the S&P 500 and Dow completing their first two-day winning streak since February. Wednesday’s gains extended Tuesday’s historic rally, which saw the Dow register its best day since 1933 and post its largest single-day point gain in history. Tuesday was the S&P 500’s best day since 2008.
Stocks still have a lot of ground to make up for before returning to record highs. The Dow, S&P 500 and Nasdaq entered Thursday’s session down at least 24.9% from their respective all-time highs set last month.
—CNBC’s Jacob Pramuk contributed reporting.
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