Stocks were higher Thursday following the S&P 500’s 3.5% drop in the previous session, the biggest lost since June 11, as economic growth in the U.S. was higher than estimates and jobless claims declined.
The Dow Jones Industrial Average rose 302 points, or 1.14%, to 26,822, the S&P 500 rose 1.74% and the tech-heavy Nasdaq was up 2.07% ahead of earnings from Amazon.com , Apple , Alphabet and Facebook .
The U.S. economy grew the most on record during the third quarter as trillions of dollars of coronavirus relief from Congress and the Federal Reserve supported household and business spending.
Third-quarter GDP growth was 7.4%, a quarterly gain that translates to an annual pace of 33.1%, a reversal from the second-quarter’s 31.4% decline following Covid-related shutdowns.
Video: Stocks sink on fears of increased coronavirus cases—Here’s what three experts say to watch (CNBC)
Weekly jobless claims fell 40,000 to 751,000, down from the upwardly revised 791,000 in the previous week.
“Even though GDP rebounded from the second-quarter plunge, the economy is still not out of the woods yet,”said Andrew Smith, chief investment strategist at Delos Capital Advisors in Dallas. “Much of the economic outlook depends on the trajectory of the coronavirus and the ability for businesses to remain open.”
Stocks finished sharply lower Wednesday as investors’ fears about the pandemic’s impact on economic activity heightened. The Dow declined 943 points, or 3.43%, to 26,519, a three-month low.
European stocks fluctuated Thursday after Germany imposed a four-week partial lockdown, and France announced tough mitigation measures to slow the spread of the virus, which has killed more than 1.175 million globally and nearly 228,000 in the U.S.
Coronavirus cases have been increasing in almost every U.S. state and the number of deaths and hospitalizations from Covid-19, the disease caused by the coronavirus, also have been rising. Measures to mitigate the spread of the virus such as closing bars and restaurants have Wall Street worried any economic recovery could be derailed.
This article was originally published by TheStreet.