Dow climbs 188 points as coronavirus stimulus measures calm investor nerves
- US stocks rallied amid additional stimulus efforts from governments and central banks.
- The gains comes as forecasts for a US recession intensify.
- The rebound follows the Dow's 1,300-point slump in Wednesday's session. The index's recent intraday low that day marked an erasure of all gains made since President Trump's inauguration.
- Watch all indexes update live here.
US stocks gained on Thursday as investors responded to additional stimulus efforts from governments and central banks.
The Dow Jones industrial average moved back above the 20,000 threshold it breached in Wednesday's session. The rally followed new aid measures from the White House meant to keep businesses and families afloat as the US faces a heightened risk of recession.
Here's where major US indexes stood as of the market close on Thursday:
- S&P 500: 2,409.44, up 0.5%
- Dow Jones industrial average: 20,087.40, up 1% (188 points)
- Nasdaq composite: 7,150.58, down 2.3%
The Trump administration is seeking a $1 trillion stimulus package that includes emergency business loans and checks for Americans. President Donald Trump also on Wednesday evening signed legislation that includes tax credits for paid sick leave and boosts programs like unemployment benefits and food stamps.
Further, the Fed has been injecting capital into the economy in an attempt to stimulate activity. The central bank has pumped trillions of dollars into markets to ease liquidity concerns and boost lending activity.
All the while, more banks have issued fresh recession warnings. Deutsche Bank projected on Wednesday that the world economy would contract the most since World War II in the second quarter as the coronavirus outbreak drives an economic shutdown. Bank of America chimed in on Thursday, saying the US economy has already entered an economic recession that will intensify through the second quarter.
Thursday's gains followed the Dow's 1,300-point slip on Wednesday. The index fell as much as 2,300 points, or 11%, during the session, at one point erasing all gains made since Trump's inauguration. The Dow surged in the last hour of the session to pare some losses.
Crude oil prices rebounded sharply, jumping as much as 24% at intraday highs. The resource has been crushed in recent weeks by an ever-escalating price war between Saudi Arabia and Russia, both of whom keep vowing to boost production.
If there's any good news to be found as markets remain deep in bearish territory, it's that the coronavirus represents a health crisis instead of the financial crisis seen in 2008, Scott Clemons, chief investment strategist at Brown Brothers Harriman, told Markets Insider. The lack of precedence around the downturn's length and depth "spooked the market," he said, and only the day-by-day trickle of virus case data can calm equities' violent price swings.
"It's not the unwillingness of people to spend money, it's the inability," he added.
Unemployment insurance claims data released Thursday morning offered an early look at the coronavirus's economic toll. Jobless claims spiked by 70,000 to 281,000 in the week ended March 14, notching its highest level in two years and surging past the consensus estimate of 220,000 claims. The update didn't include claims made after several cities ordered temporary business closures.
The steep uptick suggests the economy is being rocked harder than some anticipated, and investors are now looking for any new details on the White House's fiscal stimulus package to bring much-needed relief, Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, told Markets Insider in an email.
"It's guaranteed that Q2 will be a negative GDP number and unemployment will jump, but there is still time to put the correct policies and programs in place to try and salvage the rest of the year," he said.
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