UPDATE: Stocks see astonishing rally despite 3 million new jobless claims

Stocks climbed back into bull market territory Thursday and Wall Street saw its first three-day rally in six weeks as investors shook off news that a record 3.3 million Americans applied for unemployment benefits last week.

The Dow has now rallied more than 20 percent since hitting an all-time low just three days ago, according to the Wall Street Journal.

The astonishing rally came as major indexes jumped more than 6%, bringing the S&P 500 up 17% since Monday even as layoffs and business shutdowns sweep the country amid the coronavirus crisis.

The Dow Jones Industrial Average gained 1,351.62 or 6.38% to 22,552.17.

The NASDAQ composite index closed up 413.24 or 5.6% to 7,797.54.

The S&P 500, which had its best three-day run since 1933, shot up 154.51 or 6.24% to 2,630.07.

The markets maintained positive footing the entire day after opening higher in the wake of last night’s Senate vote approving the $2 trillion stimulus package to rescue the American economy.

The massive relief bill is expected to swiftly pass a Friday House vote and then land on the president’s desk .

»NEW: 3.3 million Americans file weekly jobless claims, obliterating 1982 record
The Dow opened the day at 364.23 or 1.72% to 21,564.78.

U.S. stock futures fell nearly 500 points on the news of the jobs report but then regained some early losses as the figure wasn’t as bad as some had feared.

But the surge in weekly applications for jobless benefits far exceeded the previous record set in 1982.

The U.S. stock market notched its first back-to-back gains Tuesday and Wednesday on optimism surrounding actions by the Federal Reserve to support credit markets and the approval in the Senate of a $2.2 trillion economic aid package.

The S&P 500 is still down 27% from the high set Feb. 19, and traders expect the market to remain volatile until the number of new cases of coronavirus levels off.

Filings for unemployment aid generally reflect the pace of layoffs. The pace of layoffs is sure to accelerate as the U.S. economy sinks into a recession.

Goldman Sachs is warning of another sharp drop in oil prices, saying some oil producers are eventually going to have to shut some wells because of dramatic decline in demand due to the coronavirus outbreak.

Goldman says demand for jet fuel and gasoline is deteriorating as governments restrict travel or would-be travelers stay home. This will result in storage for fuel filling to capacity, which in turn will result in a glut of crude oil, forcing a sharp pullback in production.

Analysts at Goldman say Brent crude, the international benchmark, will remain about $20 in the second quarter — down from $29 a barrel now — but the price of the U.S. benchmark should drop “well below $20 a barrel. U.S. crude is trading around $23.70 a barrel Thursday morning.

Global demand is expected to fall by 10.5 million barrels a day in March and 18.7 million barrels a day in April. While oil producers such as OPEC and Russia might try to offset that with production cuts, “We expect a demand shock of this magnitude to overwhelm any supply response,” the Goldman analysts say.

In their report, the analysts say that once demand comes back, the surge in oil prices could be dramatic because reversing a shut-in of production isn’t easy, and there could be a shortage once the existing supplies of jet fuel, gasoline and crude are used up.

— Information from The Associated Press was used in this report.