Stocks rally on optimism
NEW YORK — Even with the economy still in miserable shape, some investors are finding reasons to hope the worst of the plunge may have passed, and Wall Street rallied to its biggest gain in a week Thursday.
The S&P 500 climbed 1.2% for its third gain in four days, following up on similar increases in European markets. Other areas of the market were still showing much more pessimism, though, including bonds.
The day’s headliner economic report showed another 3.2 million U.S. workers applied for jobless benefits last week, bringing the total to 33.5 million over the last seven weeks. It’s a shocking number, but it’s also the fifth straight week that it has declined since hitting a peak in late March.
Several companies also cited signs that the worst may have passed in some parts of their businesses, though more weakness is still definitely on the horizon.
That was enough to bolster hopes that have coursed through the stock market recently as investors look ahead to a future that’s not as bad as the horrific present. On Wall Street, investors often care more about how quickly economic pain is increasing than about whether there is more pain.
The S&P 500 rose 32.77 points to 2,881.19. The Dow Jones Industrial Average gained 211.25, or 0.9%, to 23,875.89. The Nasdaq rose 125.27, or 1.4%, to 8,979.66 and eliminated the last of its losses for 2020 so far.
“Investors are saying: Look, I know things are bad, tell me something I don’t know,” said Sam Stovall, chief investment strategist at CFRA. “If I know things are going to be horrendous, the only way you can surprise me is to the upside.”
Everyone agrees the world is sliding into a severe recession after economies worldwide shut down in hopes of slowing the spread of the coronavirus. But some countries and U.S. states are laying out plans to relax restrictions, which has some investors focusing on the possible resumption of growth later this year.
Investors on Thursday found solace in numbers from other countries further ahead in reopening their economies, which haven’t shown a renewed surge in COVID-19 cases, said Quincy Krosby, chief market strategist at Prudential Financial.