US: Dow surges again after economic relief bill advances

[NEW YORK] The Dow surged for a third straight session on Thursday after a massive US economic relief package cleared the Senate and data showed an unprecedented spike in unemployment claims.

The Dow Jones Industrial Average finished up more than 1,350 points, or 6.4 per cent, at 22,523.15.

The broad-based S&P 500 jumped 6.2 per cent to 2,630.07, while the tech-rich Nasdaq Composite Index advanced 5.6 per cent to 7,797.54.

The gains came despite federal data showing a 3.3 million surge in jobless claims last week, reflecting the toll from the shuttering of major segments of the American economy to try to contain the coronavirus.

Investors had been expecting a staggering figure so "the shock value was mitigated a bit," said Briefing.com analyst Patrick O'Hare, who added that the size of the rally was likely boosted by end-of-the-quarter rebalancing to equities from bonds.

But Mr O'Hare predicted that the market will have some rough days ahead as the poor economic data piles up.

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"The reality is going to sink in," he said. "There's been a lot of damage done. It's going to take longer for the economy to come back."

The Senate late Wednesday unanimously approved a biggest-ever US$2 trillion rescue package that provides funding to the overstressed health care system, boosts unemployment payments and sets aside lending to small businesses that have been crippled by government-imposed shutdowns to control the spread of the coronavirus.

Passage in the Senate came after days of acrimonious debate and haggling. The bill now goes to the House, where chamber leaders have vowed quick passage on Friday.

Boeing, which is set to receive billions in federal support under the legislation, surged again, this time by 13.7 per cent.

The aerospace giant has been buffeted by dual crises, with the shutdown of airline traffic adding to its woes from the grounding of the 737 MAX.

The Senate bill also includes some US$50 billion in support for the airline industry. Major carriers were mixed, with Delta and American gaining and United and JetBlue dropping.

AFP