Coronavirus: US stocks defy record jobless claims, rise strongly on massive stimulus plan

Jodi Xu Klein

US stocks rose on Thursday, extending a buying streak to three straight sessions, despite record first-time jobless claims, on confidence that a massive stimulus package could help stabilise the economy beset by the Covid-19 outbreak.

The Dow Jones Industrial Average closed up more than 1,350 points, or 6.4 per cent, the rise sustained throughout the day, then jumping nearly 500 points in the session’s final minutes.

The benchmark 30-stock index has rallied 21 per cent in the past three days to reach its highest close, 22,552.17, since March 13, lifting itself from the technical bear market the index sank into just days ago after coronavirus fears helped the Dow slide more than 20 per cent from its peak in mid-February.

Also on Thursday, the Standard & Poor’s 500-stock index surged 6.2 per cent. The index, a broader indicator of Wall Street, has gained 17.6 per cent since Monday. The tech-heavy Nasdaq composite jumped 5.6 per cent.

The rally defied a staggering jobless claims report that 3.28 million people filed first-time claims for unemployment insurance in the week ended March 21, the first tangible sign of the impact of the coronavirus pandemic on the economy.

US Treasury Secretary Steven Mnuchin said the 3.28 million first-time jobless claims filed last week did not reflect the impact of the US$2 trillion stimulus package. Photo: Bloomberg

It was the highest level since the Labour Department began tracking the figures in 1967 and more than four times the previous record of 695,000, set in 1982. Just three weeks ago, barely 200,000 people applied for jobless benefits, a historically low number.

Instead, investors focused on the unprecedented US$2 trillion stimulus package the Senate approved 96-0 late on Wednesday and is headed to the House of Representatives for a vote, expected for Friday. House Speaker Nancy Pelosi said on Thursday she expected it to pass by a voice vote, since many representatives have already left Washington for a recess.

Trade war with China weakens key links in US medical supply chain

The bill includes hundreds of billions of dollars in grants and loans to businesses of various sizes to keep their workers on their payroll.

On Thursday morning, Treasury Secretary Steven Mnuchin shrugged off the unemployment claims report, telling CNBC that “these numbers right now are not relevant” because they came at a time before the stimulus programme had been firmed up. He said he hoped businesses would rehire their workers once the relief bill is passed.

According to Johns Hopkins University, the US has more than 80,000 confirmed cases of the coronavirus, with more than 1,000 fatalities.

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