Stocks rose on Thursday as gains in bank shares and the oil market offset another dismal round of U.S. unemployment data.
The Dow Jones Industrial Average closed 377.37 points higher, or 1.6%, at 23,625.34 after falling more than 450 points earlier in the day. The Dow also snapped a three-day losing streak. The S&P 500 climbed 1.15% to 2,852.50. The Nasdaq Composite closer 0.9% higher at 8,943.72. Both the S&P 500 and Nasdaq were down over 1% to start off the session.
Bank of America and JPMorgan Chase gained at least 4% each. Citigroup ended the session 3.6% higher while Wells Fargo advanced over 6.8%. Oil prices climbed 9% to $27.56 per barrel, leading the S&P 500 energy sector up by 0.7%.
Still, the major averages remained on track for their worst weekly performance since March 20. The S&P 500 and Dow have both lost more than 2.6% this week while the Nasdaq has fallen 1.9%.
"This market is still in this muddle-through zone where you're trying to understand how difficult will this economic environment be or is there an all-clear coming soon," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, noting the S&P 500 tested the lower end of its recent trading range.
Stocks sold off earlier in the day after the Labor Department reported a total of 2.981 million Americans filed unemployment insurance during the week ending May 9. The number came in worse than expectations of 2.7 million new claims, according to economists polled by Dow Jones.
The new claims also brought the coronavirus crisis total to nearly 36.5 million over the past two months, by far the biggest loss in U.S. history. A record of 20.5 million jobs were lost in April alone as the coronavirus-induced economic shutdown tore through the economy, sending the unemployment rate skyrocketing to 14.7%.
On Wednesday, stocks fell sharply after Federal Reserve Chairman Jerome Powell warned more needs to be done to support the economy amid the coronavirus pandemic.
"There are a lot of variables in terms of really how the economy opens here. It's going to be very uneven," said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. In terms of additional efforts, Faranello said the Fed could implement some "yield curve control," among other measures.
"From a capital perspective and a leverage perspective, the Fed can grow the existing programs that they have online," Faranello said.
Despite the sharp losses this week, the S&P 500 remains more than 30% above its March 23 low. The Dow has also rallied more than 29% since then as shares of major tech companies surged.
"Those stocks that were doing well before all this are the ones that did well" after the initial sell-off, said Aaron Clark, portfolio manager at GW&K Investment Management. "It's like the big get bigger and stronger."
Still, Clark highlighted the uncertainty investors currently face, noting: "Nobody's ever been through anything like this. … For now, we're just hoping we're finding the right businesses that can continue to grow and take share and come out stronger."
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