In this Jan. 3, 2020 file photo, the Wall St. street sign is framed by U.S. flags flying outside the New York Stock Exchange in New York. Global stocks are down, Friday, April 3, after the U.S. government said employers cut 701,000 jobs in March as they shut down or sharply curtailed business due to the coronavirus outbreak. (AP Photo/Mary Altaffer, File)
By Stan Choe
Stocks jumped in early trading on Wall Street Thursday after the Federal Reserve launched its latest unprecedented effort to support the economy through the coronavirus outbreak.
The central bank undertook actions to provide up to $2.3 trillion in loans to households, local governments and small and large businesses as the country tips into what economists say may be the worst recession in decades. It’s the latest massive move by the Fed, which has been rushing to ensure cash can get to parts of the economy that need it after lending markets got snarled earlier by a rush among investors to pull cash out of the system.
The stock market is not the economy, and that distinction has become even more clear this week. The S&P 500 jumped 1.9% in early trading Thursday, the same day the government announced 6.6 million Americans applied for unemployment benefits last week as layoffs sweep the nation.
That’s because stock investors are continuously looking ahead a few months to the future. They sent stocks down by a third from mid-February into late March, before the economy really began to crunch.
And in recent weeks, they’ve sent the market back up more than 20% following the massive aid promised by the Fed, other central banks and governments around the world, even as evidence piles up that the fears of a recession were prescient. This week, some investors have also begun to look ahead to the possibility that parts of the economy could reopen amid signs the outbreak may be peaking or plateauing in several of the world’s hardest-hit areas.
The Dow Jones Industrial Average rose 455 points, or 1.9%, to 23,879, as of 9:50 a.m. Eastern time. The Nasdaq was up 1.5%.
The S&P 500 is on track for a gain of more than 12% for the holiday-shortened week. That would be its best performance since 1974. U.S. stock markets are closed on Friday for the Good Friday holiday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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