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US stock futures remained unchanged on Thursday evening after expectations of massive fiscal stimulus increased as investors shook off the bleak unemployment data.
Dow Jones Industrial Average futures were only trading 20 points or about 0.1% higher. S&P 500 and Nasdaq 100 futures hovered around the flatline. Dow futures traded more than 100 points higher shortly after 6 p.m. to open.
The Dow gained more than 1,300 on Thursday, an increase of 6.4% to make its biggest three-day profit since 1931. The average of the 30 stocks has risen by more than 20% in the last three sessions. The S & P 500 also gained more than 6% and has also risen by more than 20% since the close on Monday.
Shares got a boost after the Senate passed a $ 2 trillion stimulus package to mitigate the economic damage from the corona virus outbreak. House spokeswoman Nancy Pelosi, D-Calif. Said the law would be passed “with strong support from both parties.” The house is expected to vote on the bill on Friday.
Federal Reserve chairman Jerome Powell’s comments also gave stocks a boost on Thursday.
“We still have scope in other dimensions to support the economy,” Powell said in NBC’s “TODAY” show. “We are trying to bridge the gap from a very strong economy to another place of economic strength.”
A massive increase in weekly unemployment claims was unable to stop the market surge on Thursday. The Department of Labor reported that unemployment benefit claims rose to 3.28 million last week, slightly surpassing the previous record of 695,000.
Thursday’s rally got the Dow and S & P 500 going for their best weekly performances since the 1930s. However, some traders are concerned about the sustainability of this increase.
“Although stocks were pushed higher in the end, credit markets continue to diverge significantly,” said Ken Berman, strategist at Gorilla Trades. “You could almost smell the burning shorts on Wall Street [Thursday]But with credit spreads still wide, one has to wonder how much ‘real’ buying is behind these weekly moves, apart from the shortage rate caused by bailouts. “
Gregory Faranello, head of US interest rate trading at AmeriVet Securities, said he was taking the rise in stocks with a grain of salt.
“I would not necessarily take price action on risk markets right now to really reflect that this is over,” he said. “This will be an economic fallout. We’ll see in two weeks, which we would normally see in maybe a year and a half or two.”
The number of coronavirus cases worldwide has risen to over 510,000, according to Johns Hopkins University. In the United States alone, more than 75,000 cases have been confirmed.