Another Thursday with a shocking number of workers losing their jobs, another gain for the stock market.
U.S. stocks pushed higher in the first few minutes of trading, even after the government said 4.4 million people filed for unemployment benefits last week as layoffs sweep the economy.
The weekly report on jobless claims has become one of the best ways to measure in real time how severely the coronavirus outbreak is crunching the economy. Over the last five weeks, they’ve shown roughly 26 million people filed for jobless aid, or about one in six U.S. workers. But if this morning’s market gains hold, it will be the fifth straight Thursday where the S&P 500 climbed following a dismal jobless report.
The S&P 500 was up 0.9% after the first 15 minutes of trading. The Dow Jones Industrial Average rose 185 points, or 0.8%, to 23,661, and the Nasdaq was up 0.9%.
Investors in the stock market are trying to set prices now for where the economy and corporate profits will be months into the future. Even though the number of people losing their jobs is appalling, some investors are looking ahead to the prospect of parts of the economy reopening as infections level off in some areas.
That, plus massive aid for the economy from the Federal Reserve and Congress, has pushed the S&P 500 up 25% since late March. The House is set to vote Thursday on another nearly $500 billion in small-business loans and aid for hospitals, a proposal that the Senate approved earlier this week. Stocks have roughly halved their loss since their February record, and the S&P 500 is down less than 17% since then.
Many professional investors say the rally is overdone, largely since there is too much uncertainty about how long the recession will last. Plus, if economies open up prematurely, it runs the risk of triggering even more waves of infections.
Stocks elsewhere around the world also made relatively modest gains, while Treasury yields were relatively little changed. That was despite the release of preliminary data on manufacturing and services activity in Europe and the United States that was even weaker than expected.
Crude oil prices jumped for a second straight day, pulling further away from zero after getting upended earlier this week. With airplanes, cars and factories idled around the world, demand has collapsed. Producers, meanwhile, can’t cut their production quickly enough, and all the extra oil around the world has sent prices plummeting.
U.S. crude oil for delivery in June rose 22% to $16.85 per barrel. It has pulled back up from less than $12 Monday, though it remains well below the roughly $60 level it started the year at.