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Stocks rally for third day despite grim jobless claims report



US stocks rallied for a third straight day Thursday despite a grim government report showing the coronavirus pandemic has put millions of Americans out of work.

The Dow Jones industrial average jumped as much as 1,022.42 points, or 4.8 percent, even after the US Labor Department said more than 3.2 million people filed for unemployment benefits last week.

The S&P 500 and the Nasdaq Composite also climbed 4.3 and 3.7 percent, respectively, building gains from Tuesday and Wednesday fueled by optimism about Congress passing a $2 trillion fiscal stimulus package to address the virus crisis.

While the weekly jobless claims report shattered the record of 695,000 set in 1982, it didn’t appear to shock investors who had long anticipated that the pandemic would wreak havoc on the labor market.

“This stock market has fallen about seven times faster than any other bear market in postwar history, and that tells me there’s a lot of bad news already discounted,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “It’s got to get worse than what’s already in there, and there’s a lot of bad stuff in there.”

Thursday’s market rally came as the House of Representatives took up the massive stimulus bill that promises to cut checks to workers and provide support for virus-battered businesses. Hopes for a spending package this week led the Dow to post two consecutive days in the green for the first time since early February.

Jobless claims spiked more than most expectations, but not as much as some analysts feared. Citigroup reportedly predicted 4 million claims, while economists surveyed by Reuters largely expected 1 million.

The numbers aren’t likely to improve in the near future as the coronavirus keeps businesses shut across the country. Some economists expect the US unemployment rate to reach or surpass 10 percent, its peak during the Great Recession of a decade ago.

“Unfortunately, we do expect more numbers like this in the coming months,” Burt White, chief investment officer at LPL Financial, said in a commentary. “At the same time, markets are forward looking and will be more focused on how quickly we might be able to get to the other side.”

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