Wall Street Close: Bulls taking back control on optimism in additional stimulus
- Dow Jones Industrial Average added 377 points, or 1.6% to close near 23,625.
- The S&P 500 index put on roughly 33 points, or 1.2%, to end the session at 2,852.
- Nasdaq Composite index advanced 81 points, or 0.9% to close around 8,944.
Despite the negative commentary from Federal Reserve Chair Jerome Powell the prior day, US benchmarks have been able to recover into Thursday with financials making the major moves and lifting all boats. The moves have snapped a two-day losing streak and set the benchmarks up for a positive close for the week, depending on sentiment trajectory on Friday.
Oil has been a positive factor this week, continuing to find higher grounds again on production cut hopes while, on Thursday, shares of financial companies such as American Express and JPMorgan & Chase Co. lifted the DJIA. Consequently, the Dow Jones Industrial Average added 377 points, or 1.6% to close near 23,625, the S&P 500 index put on roughly 33 points, or 1.2%, to end the session at 2,852 while the Nasdaq Composite index advanced 81 points, or 0.9% to close around 8,944.
Powell was a mixed bag on Wednesday, something for both the bulls and the bears
Powell on Wednesday said that “lasting damage” may be done to the US economy in the wake of the coronavirus pandemic which lead the markets to believe that additional stimulus on both the monetary and fiscal policy fronts to ward off a deeper and more destructive downturn is on the cards. This potentially fed through to the financials, seeing another life-raft on the horizon beyond the next tidal wave. On a more positive note, Powell also said he expected that unemployment would peak “over the course of the next month or so,” after the jobless rate surged to a record high of 14.7% in April. Meanwhile, the Dow had been off as many as 458 points after the US jobless claims were higher than expected in the week to 9 May, up 2.98m vs 3.17m the prior week. "The market was expecting 2.5m. Initial claims show that a total of 36.5m jobs have been lost in the last eight weeks," analysts at ANZ Bank noted.
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