Stocks ended last session higher even though the new economic data showed that weekly unemployment insurance claims far exceeded expectations. The markets have been volatile in the previous months as the countries went into lockdown due to the coronavirus pandemic.
The Dow Jones increased by 534 points before declining briefly. On the other hand, the S&P 500 and Nasdaq each hit the lowest record over the last two weeks on Wednesday. Investors’ concern about extended stay-in-place orders and widespread lockdown caused such decline.
New jobless claims doubled, reaching 6.648 million as an increasing number of businesses shut down operations. The claims’ record level underscored the negative impact the outbreak has had on the domestic economy, causing the labor market swift devastation rather than building to a peak as in prior downturns.
Coronavirus’ impact on the stocks is more severe, then analysts anticipated
Chris Rupkey, the chief financial economist for MUFG Banks, stated that analysts expected massive job losses. According to him, Washington and state governments were not prepared for the rapid spread of the coronavirus.
The social distancing measures, while a necessary step to prevent the virus, have weighed heavily on the economy, as well as individual businesses, many of which have had to lay off workers. Automakers Fiat Chrysler and General Motors each reported sharp first-quarter sales declines, as consumers preferred to stay at home.
However, crude oil prices surged recently, rising more than 34% at the intraday highs on Thursday. President Donald Trump stated that he expected Saudi Arabia and Russia to pare back production by millions of barrels of oil per day. According to reports, China was planning to start purchasing crude oil for its strategic reserves. That further inflated the oil’s price.
As a result, some stocks managed to edge up slightly. They finished the last session in better condition, then the analysts expected.
