Before The Bell
- Wall Street strove for a so-called three-peat yesterday. Specifically, after weeks of steady and alarming losses, the stock market rallied strongly on Tuesday, with the Dow Jones Industrial Average soaring by 2,113 points. The catalyst for that historic rebound was the promise of the pending $2 trillion fiscal stimulus program, which was designed to help alleviate some of the economic pain brought about by the fast-spreading coronavirus pandemic. Further progress on that bill then helped stocks advance modestly on Wednesday.
Then, yesterday, the mood was still upbeat as the bill's passage seemed all but assured, after getting the nod of the U.S. Senate. However, an hour before the opening of trading, that optimism was shaken by the release of shockingly poor jobless claims data. To this point, most of the economic surveys had covered the economy for February, or before the full thrust of the virus had been felt. But the claims data, issued on a weekly basis, was more up to date. And that report was clearly sobering.
On point, expectations had been for layoffs to have totaled 1.5 million. Instead, the weekly claims soared by 3.28 million. The market was initially shocked by this dour report and the futures fell back. However, when the market opened an hour later, calmer heads had prevailed, and stocks started action clearly to the upside, with the Dow making a triple-digit early advance. The blue chips then would rally further, so that as noon arrived on the East Coast, the Dow was ahead by 1,200 points.
The advance would continue into and through the afternoon hours, with investors apparently more excited by the stimulus package that would soon be going into effect than they were chagrined by the record high weekly job losses. The market then received a positive jolt just before the close when the Dow would surge from a gain of about 800 points to a closing increase of more than 1,300 points. In all, it was the third straight advance for the market, and the biggest three-day climb since 1931.
As to individual groups, the surge was led by several of the high-profile tech names domiciled on the NASDAQ, an index that would jump by 413 points. Also doing well were aircraft manufacturer Boeing (BA) and oil giant Chevron (CVX). Those two issues helped the blue chip composite run up by 1,352. All told, Boeing has jumped from $90 a share as recently as Monday to $180 a share at yesterday's close. The aerospace giant figures to be a big beneficiary of the stimulus agreement.
Now, the quest will be for a fourth straight advance, and on that count, the equity futures are pointing to a pullback to start the new session.