Wall Street rallies on hopes for slowing economic pain

Stocks climbed in morning trading on Wall Street Thursday as reports suggested that even though the economy is still getting walloped, at least conditions aren't worsening as quickly as they had been.

The S&P 500 was up 1.2 per cent, following up on similar gains in Europe. Oil prices also rose, but other areas of the market were more hesitant, including bonds and Asian stocks.

The day's headliner economic report showed another 3.2 million U.S. workers applied for jobless benefits last week, bringing the total over the last seven weeks to 33.5 million. It's a shocking number, but it's also the fifth straight week that it has declined since hitting a peak in late March.

 

Several companies on late Wednesday also cited signs that the worst may be behind them, at least in some parts of their businesses, though more weakness is still definitely on the horizon.

That was enough to bolster hopes that have coursed through the stock market recently as investors look ahead to a future that's not as bad as the horrific present. On Wall Street, investors often care more about how quickly economic pain is increasing than about whether there is more pain.

The Dow Jones Industrial Average was up 268 points, or 1.1 per cent, to 23,932, as of 11 a.m. Eastern time. The Nasdaq was up 1.1 per cent and has recovered nearly all its losses for 2020.

Everyone agrees the world is sliding into a severe recession after economies worldwide shut down in hopes of slowing the spread of the coronavirus.

But countries and some U.S. states are laying out plans to relax restrictions, which has some investors focusing instead on a possible resumption of growth later this year.

The S&P 500 has more than halved its 34 per cent loss from February into late March, though many analysts say the rally has been overdone given how much uncertainty still exists about how long the recession will last.

Lyft jumped 23 per cent after it said late Wednesday that ride levels appear to have steadied after hitting a bottom in the second week of April. Over each of the three following weeks, the number of rides has grown from the prior week, though they're still down more than 70 per cent from a year earlier.