“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” Fed Chair Jerome H. Powell said in a statement. “The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”
The Dow had jumped more than 500 points before retreating. The blue chips still managed to pick up 277 points, or 1.2 percent, to settle at 23,710.75. The Standard & Poor’s 500 index added nearly 40 points, or 1.5 percent, to 2,789.82, and the tech-heavy Nasdaq advanced roughly 63 points, or 0.8 percent, to close at 8,153.58.
All three indexes ended the shortened week — markets are closed for Good Friday — on a strong note. The S&P 500 surged more than 12 percent — its best week in decades. The Dow climbed 12 percent and the Nasdaq jumped 10.6 percent. But as recent weeks have show, the tides could change at any time.
“A rally doesn’t mean we’re out of the woods just yet, nor that volatility is a thing of the past,” Mike Loewengart, managing director of investment strategy at E-Trade, said in an email to The Washington Post. “If there is one thing recent history has shown us it’s that optimism can wear off quickly if cases climb or stay-at-home orders are extended.”
Fresh unemployment data Thursday revealed more than 6.6 million Americans filed jobless claims the week ended April 4, adding to the more than 10 million jobless claims racked up in March as the pandemic swept through the nation. Janet L. Yellen, one of the world’s top economists and a former Fed chair, estimates the U.S. unemployment rate is already between 12 and 13 percent, which would be the worst rate since the Great Depression. Last Friday, the Labor Department put the rate at 4.4 percent.
With tens of thousands of businesses closed due to shelter-in-place orders in more than 40 states, the hospitality sector — hotels, restaurants and amusement parks — weathered the steepest losses. For the week ended March 28, California reported that some 872,000 workers from service industries filed for unemployment.
As layoffs skyrocket, the path back to economic recovery grows longer. Chris Rupkey, chief financial economist of MUFG Union Bank, said in commentary Thursday that the country’s quickest recovery, after the 1980 recession, took about a year. The outlook now, with no sure timeline for a return to normalcy, seems grimmer.
“The labor market is a game of musical chairs in recessions, and there will be less seats at the table for workers once the recession ends,” Rupkey wrote. “Companies will realize they don’t need to hire back everybody they let go, especially when orders and sales are not coming back a full 100%.”
President Trump is preparing to unveil a second coronavirus task force as soon as this week to shore up the economy. Job losses have mounted even after Congress passed a historic $2 trillion relief package, and businesses small and large are struggling to access crucial loans.
Consumer confidence plunged to its lowest level since 2011 in early April, the University of Michigan reported, its biggest-ever one-month decline. The drop-off reflects the overwhelming uncertainty amid skyrocketing layoffs and business closures: Just two months ago, consumer confidence was approaching a 15-year high.
Despite the rally, some investors flocked to safety. The yield on the 10-year U.S. Treasury note declined 0.01 percent in early trading; bond yields drop as prices rise. Gold, another haven, was trading up nearly 3 percent at $1,734 an ounce.
Oil prices roared higher in morning trading, with Brent crude, the global oil benchmark, surging more than 4.3 percent to trade at $34.28 a barrel. Investors are awaiting the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, where the world’s major oil producers are expected to announce deep cuts to production.
The meeting had been postponed amid rising tensions between Russia and Saudi Arabia. The two giants are embroiled in a price war that has caused a global oil glut amid cratering demand from the pandemic.