The Dow Jones Industrial Average rose for a third day on Thursday as the latest unemployment data signaled the worst of the economic damage from the coronavirus pandemic may be over.
The 30-stock Dow traded 114 points higher, or 0.4%. The S&P 500 gained 0.2%. The Nasdaq Composite lagged, with a 0.2% drop.
The Labor Department said Thursday another 2.1 million Americans filed for unemployment benefits last week. That's more than a Dow Jones estimate of 2.05 million. To be sure, the pace of new filings has dropped from previous weeks. Continuing claims, which represent a better unemployment picture, plunged by nearly 4 million in their first decline since the coronavirus outbreak.
Bank of America CEO Brian Moynihan told CNBC's "Squawk Box" on Thursday that the U.S. economy is coming "out of the hole," noting: "You're seeing us come out of the depths of where we were in April, and that's good news."
Stocks that would benefit from the economy reopening rose on Thursday. JPMorgan Chase, Citigroup and Wells Fargo all gained slightly. Dollar Tree popped more than 10% on the back of stronger-than-forecast quarterly numbers.
Shares of companies that rose on the back of stricter stay-at-home orders fell. Zoom Video slid 1.8%. Shopify shares dipped 1.1% while Amazon lost 0.4%.
Thursday's market moves added sharp rallies in the major stock indexes so far this week.
The S&P 500, Nasdaq Composite and Dow are up 2.7%, 0.9% and 4.4% since the start of the holiday-shortened week. The Dow is on track for its best week since the week ended April 8.
Traders say this week's rally is in large part thanks to optimism about the reopening of the U.S. economy.
"The greatest stimulus for the economy is a safe reopening," wrote Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. "In the end, reopening in and of itself will gradually show improvement although the true demand side still remains unclear."
Gains were kept in check after China's National People's Congress approved a national security bill for Hong Kong. The bill will bypass Hong Kong's legislature, raising concerns over the longevity of Hong Kong's "one party, two systems" principle, which allows additional freedoms mainland China does not have.
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May 28, 2020 at 08:33PM
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