The stock market ended a choppy day on a high note as a turnaround by banks and energy companies helped end a two-day losing streak.
The S&P 500 managed a gain of 1.2% Thursday, but it’s still down 2.6% for the week. The latest erratic trading came as hopes for a relatively quick economic recovery continue to collide with caution that moves to reopen the economy could backfire by causing more infections if carried out too soon.
Energy stocks did well after the price of crude oil bounced up 9% on hopes that demand could pick up after collapsing amid the coronavirus shutdowns.
U.S. stocks sank at the opening bell as more than 2.9 million more Americans filed jobless claims in the last week, further straining the labor market in the world’s largest economy.
The market was coming off two straight days of losses, even as nearly all 50 states have taken tentative steps to reopen businesses amid the pandemic.
With coronavirus cases seeing a resurgence in some areas around the world, investors appear to be turning pessimistic about life getting back to normal soon.
With the number of unemployed soaring to more than 36 million in the last eight weeks, and the U.S. central bank chief warning of hard times to come, the markets bounced back strongly in a roller-coaster day.
The Dow Jones Industrial Average closed up 377.37 or 1.62% to 23,625.34.
The NASDAQ composite index increased 80.56 or .91% to 8,943.72.
The S&P 500 also rose 32.50 or 1.15% to 2,852.50.
What it means
Analysts say they expect the market to remain in a wait-and-see approach for weeks as investors gauge how economic reopenings underway are going.
Investors want to see if second waves of coronavirus infections occur if governments lift their restrictions on businesses too soon. Another flare-up in trade tensions between the United States and China has also recently weighed on investor sentiment.
Stephen Innes, chief global strategist at AxiCorp, said markets were jittery after comments from Federal Reserve Chair Jerome Powell, which set off worries about the risks of corporate failure in the U.S. and job losses.
“The roller coaster recovery continues to be the theme of the week,” Innes said, noting a second wave of COVID-19 infections could be ahead if lockdowns in any part of the world are eased too quickly.
Powell urged Congress and the White House to provide more help for the economy to prevent long-lasting damage to an economy already bleeding millions of jobs.
While costly, more assistance in government spending or tax policies would be “worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” he said.
President Donald Trump has described a newly proposed $3 trillion aid package as “dead on arrival.”
The latest on oil
U.S. benchmark crude gained $1.12 to $26.41 a barrel in electronic trading on the New York Mercantile Exchange. It fell 65 cents to $25.68 on Wednesday. Brent crude, the international standard, rose $1.08 to $30.27 a barrel.
Around the world
In Europe, France’s CAC 40 was down 1.9% to 4,261, while Germany’s DAX fell 1.8% to 10,357. Britain’s FTSE 100 was down 2.4% at 5,765. U.S. shares were also set for declines, with Dow and S&P 500 futures both down 0.2%.
Japan’s Nikkei 225 slipped 1.7% to finish at 19,914.78. Australia’s S&P/ASX 200 lost 1.7% to 5,328.70. South Korea’s Kospi dropped 0.8% to 1,924.96. Hong Kong’s Hang Seng dipped 1.5% to 23,829.74, while the Shanghai Composite lost nearly 1.0% at 2,870.34.
India’s Sensex skidded 2.7% to 31,142.24. Shares also fell in Southeast Asia.
Japanese officials were preparing to announce an easing of the nationwide “state of emergency,” which has strongly requested that non-essential workers stay home. Some regions where infections aren’t spreading too much may get further reopened, although with some social distancing measures in place.
Japan has so far has reported 687 COVID-19 deaths, but has had no lockdown. Public discontent is brewing, but people are also worried about health risks and whether infections could start rising exponentially, as they did in New York, Brazil and elsewhere.
Major Japanese companies, such as Toyota Motor Corp. and Sony Corp., have announced sharp drops in profits as the pandemic took hold, and have not given profit projections, or only gave partial forecasts, for the year through March 2021.
The dollar edged up to 107.08 Japanese yen from 107.03 yen. The euro fell to $1.0780 from $1.0818.
— Compiled and edited by ArLuther Lee for The Atlanta Journal-Constitution.
About the Author
