Stocks rise despite another surge in unemployment claims

Stocks rise despite another surge in unemployment claims

US stocks ticked up Thursday as Wall Street tried to brush off another surge in unemployment filings amid the coronavirus crisis.

The Dow Jones industrial average climbed as much as 62.01 points, or 0.2 percent, at the open despite the US Department of Labor reporting another 5.2 million initial jobless claims last week. The staggering figure means the pandemic put more than 22 million people out of work in just a month.

The S&P 500 and the Nasdaq Composite also jumped as much as roughly 0.7 and 1.2 percent, respectively, in early trading. All three indexes bounced after posting losses Wednesday as fears about the virus’s economic toll weighed on investors.

The jump followed a Wednesday evening briefing where President Trump said the coronavirus has peaked in the US and indicated that some states will reopen by May 1. Thursday’s jobless claims number also marked a decline from the week ending April 4, when more than 6.6 million people sought unemployment benefits.

“We hope stock market investors are right that the peak in layoffs each week means the worst is over, but somehow it seems irrelevant how fast the layoffs are coming as long as they are coming,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

Investors were encouraged earlier in the week by signs that the peak of the virus crisis has passed, such as some European companies letting businesses get back to work and US states forming plans to restart their economies after imposing lockdown measures.

But Wall Street has also had to digest a slew of bad economic news amid continued uncertainty about just how long the shutdown will last.

“What the market cannot price in perfectly is when the economy re-opens, what the nuances in that reopening will look like and what its impact will be to corporate profits one quarter away, two quarters away and a year away,” said David Bahnsen, chief investment officer at the Bahnsen Group.

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