Stocks finished higher Thursday following a surge in oil prices, but a sharp jump in weekly jobless claims served as real-time evidence of the effect the coronavirus pandemic was having on a reeling U.S. economy.
The U.S. Labor Department reported that jobless claims for the week ended March 28 were 6,648,000, topping even the highest of economists' predictions.
That was more than double last week's report of 3.3 million Americans being out of work and having filed for jobless claims as the U.S. economy shut down and stay-at-home measures were enforced amid the virus outbreak.
The jobless-claims data were released a day ahead of the official U.S. jobs report for March, which is expected to show a drop in payrolls for the first time since 2010.
"The U.S. labor market has never experienced such disruption. No doubt, this is a gargantuan number and way above what pundits were predicting, but the market seems to have been pricing in the worst on all fronts..., " said Mike Loewengart, managing director of investment strategy at E*Trade.
“Not surprisingly, some of the hardest hit pockets include gig and food services workers, but also (Thursday’s) report shows that the impact of the virus is more far-reaching than many had expected. And with more and more states issuing shelter in place orders, the job market could continue to see significant strain for the foreseeable future.
“Most will likely say the U.S. is sitting squarely in a recession right now, but the real question at hand is for how long and to what extent,” he added.
The Dow Jones Industrial Average gained 469 points, or 2.24%, to 21,413, the S&P 500 was up 2.28% and the Nasdaq rose 1.72%.
Stocks got a lift from an increase in oil prices that came after President Donald Trump said he expected Saudi Arabia and Russia to cut oil production by about 10 million barrels after he spoke by phone with Crown Prince Mohammed Bin Salman, Bloomberg reported.
Brent-crude futures rose 20.7% to $29.87 a barrel on Thursday and West Texas Intermediate crude jumped 21.6% to $24.70 a barrel.
The president also said he'd be meeting with executives of the biggest U.S. oil companies. Reports said the meeting would take place Friday.
Meanwhile, NBC reported that the first Americans to receive government relief under the coronavirus legislation signed into law last month won’t see direct deposit payments until at least the week of April 13 and it could take five months for all the paper checks to go out.
Stocks on Wednesday closed with sharp losses - the S&P 500, Dow and Nasdaq each fell 4.4% - after the White House warned the United States could see 100,000 to 240,000 deaths as the coronavirus spreads nationwide. On Tuesday, the Dow closed out its worst quarter since 1987.
The number of confirmed global cases of the coronavirus has risen to 1,002,159, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths increased to 51,485.
The U.S. has 236,339 cases of the coronavirus, according to Johns Hopkins CSSE. Deaths in the U.S. have risen to more than 5,620.