Wall Street rallied for the third straight day Thursday, with investors showing renewed confidence in the economy despite record-breaking unemployment claims as business activity grinds to a halt nationwide.
The Dow Jones Industrial Average ended the day with a gain of just over 1,300 points, or almost 6.5 percent. The S&P 500 and the Nasdaq closed higher, up by around 6 percent each.
Traders remain optimistic that Congress will pass the $2 trillion coronavirus relief package that will give a boost to businesses ravaged by the coronavirus pandemic and provide support to unemployed Americans.
New jobless claims from the Department of Labor showed a staggering 3.28 million Americans filed for unemployment last week, the first official snapshot of the economic damage wrought by the coronavirus pandemic.
The massive spike in unemployment claims comes as nationwide lockdowns to halt the spread of the virus have kept Americans going from work, forced many companies to shut their doors and lay off staff.
While economists and market participants were expecting an outsize number of unemployment claims, Thursday's total was far higher than anticipated, outpacing expectations of around 1 or 2 million.
However, the figure was dismissed by Treasury Secretary Steven Mnuchin.
“I just think these numbers right now are not relevant,” he said Thursday in an interview with CNBC.
Robard Williams, a senior vice president at Moody’s analyst service, said that while the Federal Reserve and the government have intervened to soften the blow, “this week’s unemployment insurance claims provide a clear gauge of the substantial negative impact the coronavirus pandemic has had on the U.S. economy, which we expect to slide into recession this year."
Federal Reserve Chairman Jerome Powell echoed that sentiment in a rare interview Thursday morning, telling Savannah Guthrie on NBC's "TODAY" show: “We may well be in a recession, but I would point to the difference between this and a normal recession. There is not anything fundamentally wrong with our economy. Quite the contrary. We are starting from a very strong position.”