Business

Wall Street up sharply despite soaring jobless claims

Wall Street comfortably settled in the green on Thursday despite the record increase in the number of unemployment benefit claimants in the United States and after the Senate voted on a plan to revive the American economy to deal with the coronavirus.

The Dow Jones Industrial Average climbed 6.38% to 22,552.17 points.

Thanks to this progress, the third in a row, the star index for the New York market has left the bear market where it had settled two weeks ago. This expression, taken from stock market lingo, is used when the Dow Jones drops 30% from its last record.

The highly technological Nasdaq took 5.60% to 7,797.54 points, and the broad S&P 500 index gained 6.24% to 2,630.07 points.

Investors seemed to ignore the unprecedented surge in jobless claims in the United States.

Weekly claims for unemployment benefits have indeed reached an all-time high, peaking at 3.3 million last week, according to figures released Thursday by the Labor Department. This is 3 million more than the previous week, an increase never seen before.

According to Patrick O'Hare of Briefing.com, “there was a lot of talk about the fact that these numbers were going to be bad, which eased the shock wave a bit” when the report was released.

However, the expert believes that the market remains under pressure and warns that data attesting to the sudden slowdown in the world's leading economy will accumulate in the coming weeks.

In addition, the brokers were reassured by the adoption in the Senate, on the night of Wednesday to Thursday, of a vast recovery plan, which provides 2,000 billion dollars to support the American economy.

This text must now be approved by the House of Representatives, in a vote scheduled for Friday, then promulgated by US President Donald Trump.

O'Hare said Thursday's increase is also linked to “portfolio rebalancing as the end of the quarter approaches.”

“Investors who held too many bonds sold them to put their money in stocks,” said the expert.

“This movement is not necessarily reflected in the bond market because the Federal Reserve buys many treasury bills there,” said O'Hare.

The 10-year rate on the American debt, which goes down when the price of the bonds increases, was actually falling, settling at 0.8415% around 20.25 GMT against 0.8673% the day before at the close.

– New Boeing leap –

In terms of values, Boeing experienced another spectacular increase of 13.8%. Investors expect the American aircraft manufacturer to obtain substantial federal aid to help it overcome the coronavirus and 737 MAX crises.

Micron Technology appreciated 5.4%. The manufacturer of electronic chips announced Wednesday, at the end of the day, quarterly results above expectations and reassured the market by better than expected financial forecasts.

Apple appreciated 5.3%. According to the Nikkei Asian Review, the apple brand plans to postpone the launch of its next iPhone model for several months due to the disruption of the supply chain and the drop in demand due to the coronavirus.

Ford fell 2.6%. The rating agency S&P downgraded the rating of long-term debt of the American car manufacturer from BBB- to BB + on Wednesday evening, which puts the group from Dearborn (Michigan, north) in the category of speculative borrowers or “junk leaps “.

Ford announced however Thursday, as well as Fiat Chrysler (+ 4%), consider resuming production in mid-April in its factories closed due to the coronavirus pandemic.

Tags

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close