All three major U.S. indexes did rise Thursday at the open, but not before they were down considerably in the futures market.
The Senate passed the $2 trillion spending bill that includes hundreds of billions of dollars both to hospitals dealing with the coronavirus and small businesses and households. Contending with that positive was the report that 3.2 million filed jobless claims in the past week, a record. That’s roughly 1% of the population, just in the last week, saying they are out of work.
The S&P 500 was up 2%, but sentiment was still constrained and may keep stocks in check.
Wall Street is now crying out for more stimulus, even though it knows the stimulus still has to low through to hurting households and businesses. The stimulus still has to work through the system, especially for the people that are without income now, but investors and analysts are worried that, as the virus lasts, more spending will be necessary.
"There is no sugar coating these numbers--they are bad,” wrote Jamie Cox, Managing Partner for Hariss Financial Group in emailed remarks to reporters. "Markets have had several days to digest what everyone knew was coming; therefore, the market response to these numbers may differ than what people might expect. I would suggest that all Americans should look at these data as a reason to #stayhome to not only kill the virus, but to get the people that these numbers represent back to work.”
"Today’s jobless figures will give us a first taste of whether $2 trillion is even enough,” said Jasper Lawler, head of research at London Capital Group. He said before the claims number came out, "If we see a number above 2 million, markets will start clamouring for the next government or central bank bailout.”
Seema Shah, Chief Strategist at Principal Global Investors said "The implications for policymakers is clear. The fiscal package as announced is a positive, but may need to be tweaked in order to provide more protection to workers and give incentives to businesses to furlough workers instead of letting them go.”
"The stock market sold off in advance of this shock to the economy – and this jobless claims number validates the fear that drove that selloff,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “But the market has since rallied on the assumption that a stimulus bill will be passed.”
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