US: Stocks finish positive amid virus optimism, Dow adds 1.1%

[NEW YORK] Cautious optimism on Wall Street propelled US stocks to a positive finish on Friday, despite mounting evidence of the coronavirus pandemic's deep damage to the American economy.

At the closing bell, the Dow Jones Industrial Average was up 1.1 per cent at 23,775.27.

The broad-based S&P 500 climbed 1.4 per cent to end at 2,836.74, while the tech-rich Nasdaq finished 1.7 per cent higher at 8,634.52.

However Wall Street finished the five-day stretch negative overall, with the Dow losing 1.9 per cent over the course of a week that began tumultuously as the US benchmark oil price crashed into negative territory for the first time as traders tried to unload futures contracts amid a supply glut.

Labor Department data released on Thursday showed the coronavirus cutting deeply into employment, with the number of new jobless claims rising to around 26 million since mid-March.

Meanwhile, the Congressional Budget Office on Friday predicted the US economy would contract by 12 per cent in the second quarter, with the unemployment rate hitting 14 per cent.

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And with the near-total shutdown of airline travel, the Commerce Department reported that new orders for durable goods plunged 14.4 per cent, largely driven by cancellations of orders for Boeing aircraft.

Karl Haeling of LBBW said there was no clear reason for why stocks nonetheless staged a mild rally on Friday after a flat finish the day before.

However, it seemed traders had grown used to the gloomy forecasts and were heartened by Congress's passage of a bill providing an additional US$483 billion of government funds to rescue small businesses.

"The market is now comfortable with the second quarter being absolutely horrible," he said. "It's a time issue about when the activity will start back up."

AFP