Stocks finished higher Thursday after a day of wobbly trading as investors contended with a strong showing by bank stocks, a surge in coronavirus infections and a worse-than-forecast jobless-claims report.
In Texas, Gov. Greg Abbott halted a phased reopening of the state as coronavirus cases and hospitalizations surged. It was announced earlier that Texas suspended elective surgeries as hospitals approached full capacity.
Like Texas, Florida hit daily records for coronavirus infections.
The Dow Jones Industrial Average finished up 299 points, or 1.18%, to 25,745, the S&P 500 rose 1.1% and the Nasdaq gained 1.09%.
JPMorgan Chase, Wells Fargo , Citigroup and Bank of America traded higher after the Federal Deposit Insurance Corp. approved changes to rules that would free up capital for banks and allow them to make large investments into venture capital and similar funds.
A requirement also was scrapped that forced lenders to hold margin when trading derivatives with their affiliates, according to Bloomberg.
The U.S. has 2,404,781 cases of the coronavirus, the most in the world, according to Johns Hopkins University. Deaths in the U.S. have risen to 122,370, also the most in the world.
Stocks got hammered Wednesday as virus cases spiked, renewing investors’ fears that a hoped-for economic recovery from the pandemic could take longer than anticipated.
“We believe investors should prepare for continued volatility as the stock market digests the continued increase in Covid-19 infection rates and the impressive rally from the March 23 market lows,” said Andrew Smith, chief investment strategist at Delos Capital Advisors in Dallas.
“Although the summer typically brings seasonal weakness for stocks, the increased uncertainty regarding a potential second wave in Covid-19 cases coupled with a resurgence in tariff threats will only exacerbate volatility within the coming weeks and months,” Smith added.
The number of Americans seeking and receiving unemployment benefits was near 1.5 million again last week as businesses continue to struggle with reopening and rehiring after more than three months of lockdowns due to the coronavirus pandemic.
The Labor Department said Thursday that 1.48 million Americans filed jobless claims for the week ended June 20, down slightly from the revised 1.5 million claims for the week earlier. Economists had expected jobless claims of 1.325 million.
“As suspected, jobless claims were increasing in states like California, Arizona, and Florida where there has been a notable pickup in virus cases,” said Charles Ripley, senior investment strategist for Allianz Investment Management.
“However, in aggregate, claims trended lower as the reopening of businesses in many states offset the increasing claims in troubled states.”
Gross domestic product in the U.S. contracted 5% in the first quarter, according to the final estimate from the Commerce Department, as consumer spending was weaker than expected.
“Broadly speaking, the economic data that was released earlier (Thursday) was a mixed bag. The declines in GDP and personal consumption were close to what surveys were expecting so in some ways it feels like a win,” said Brian Price, head of investments for Commonwealth Financial Group.
“However, we’re still seeing notable contraction so it’s hard to imagine that the market is going to be overly enthused and move higher as a result of this data.”