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Investing.com – The Dow surged Thursday as investors bet the Federal Reserve and Congress will continue to provide measures to rescue the economy at a time when nationwide containment measures have brought business activity to a halt and sparked a record jump in unemployment claims.
The Dow jumped 4.42%, or 937 points, the S&P 500 surged 4.25% and the Nasdaq Composite rose 3.46%.
With Congress expected to pass a $2 trillion stimulus package and Fed Chairman Jerome Powell reiterating the central bank’s pledge to ramp up its bond-buying program, investors are betting big on stocks once again.
In an interview with NBC News earlier Thursday, Powell conceded that the U.S. “may well be in a recession,” but the Fed is “working hard” ensure that an eventual recovery will be strong as possible.
“When it comes to lending, we are not going to run out of ammunition,” he added. “That just doesn’t happen.”
The pledge from the Fed chief came as Covid-19 infections in the U.S. surged above 75,000, with deaths topping 1,000. The lockdown measures to combat the virus has forced major disruptions across businesses, the effect of which was seen in the weekly initial jobless claims figures, which came in at 3.3 million. Claims hadn’t topped 700,000 before.
Energy stocks were among the biggest gainers on the day, shrugging off a fall in prices.
Industrials, meanwhile, continued to get a lift from Boeing (NYSE:BA), up 14%, as the stimulus bill – expected to be approved by the House – will provide the aviation sector with much-needed fiscal boost.
