Thursday’s Stock Market Close: US Equities Rise In Volatile Session, Powered By Surging Bank Stocks

U.S. stocks closed higher on Thursday as a new FDIC ruling pushed up bank shares, while traders digested reports of new coronavirus infections and another grim jobless claims report.

The Dow Jones Industrial Average rose 299.66 points to 25,745.60, while the S&P 500 climbed 33.43 points to 3,083.76 and the Nasdaq Composite Index gained 107.84 points to 10,017.00.

Thursday’s volume on the New York Stock Exchange totaled 4.16 billion shares with 1,875 issues advancing, 25 setting new highs, and 1,097 declining, with 15 stocks setting new lows .

Active movers were led by Inovio Pharmaceuticals Inc. (INO), Vaxart Inc. (VXRT) and Ekso Bionics Holdings Inc. (EKSO).

Initial jobless claims totaled 1.48 million last week, higher than expected and the 14th straight week that such filings remained above 1 million.

Heather Long of the Washington Post tweeted: “It's highly concerning that 1.5 million people are still filing new jobless claims [three] months into this crisis. That number should be coming down if the job situation was truly improving.”

“No matter which way you look at it, over a million unemployed is a very bad thing,” said Mike Loewengart, managing director of investment strategy at E-Trade. “It will take some time to unwind the structural damage COVID has caused across the world. While it’s certainly uncomfortable, the everyday investor should be used to ongoing market volatility at this point.”

Durable goods orders increased by 15.8% on a monthly basis to $194.4 billion in May following a decline of 17.7% in April.

Florida reported 5,004 new coronavirus cases on Thursday, while new cases jumped in Arizona.

Texas Gov. Greg Abbott said the state will delay its planned reopening due to a recent spike in covid-19 cases and hospitalizations.

Houston, Texas said its intensive care unit beds are now at near capacity. New York, New Jersey and Connecticut ordered visitors from Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Texas and Utah to self-quarantine for 14 days.

“I think we’re going to see a second wave of [virus] cases,” said Komal Sri-Kumar, president of Sri-Kumar Global Strategies. “That’s my biggest worry about the market. At some point, you have to come back to fundamentals and if the fundamentals haven’t improved, all the stimulus-related increase in equity prices must be given back.”

“The market really got the shivers over the prospect of a big increase in Covid and maybe starting to see places that were opening up have to close up,” said Margie Patel, portfolio manager at Wells Fargo Asset Management. “We’ve had such a great run from the end of March it’s only inevitable that we should get at least a little step back.”

Bank stocks surged after the Federal Deposit Insurance Commission said it will make it easier for banks to make large investments into funds, including venture capital funds. Banks will also not have to set aside cash for derivatives traders between different units of the same firm, which could free up more cash.

“When we think about a recession of the magnitude that we have, there’s going to be some credit write-offs by banks,” said Art Hogan, chief market strategist at National Securities. “The fact that they’re going to have more working capital makes markets breathe a sigh of relief.”

Overnight in Asia, the Shanghai Composite and Hong Kong’s Hang Seng exchanges were closed for holidays; while Japan’s Nikkei-225 sank 1.22%.

In Europe markets closed higher, as Britain’s FTSE-100 rose 0.38%, while France’s CAC-40 rose 0.97% and Germany’s DAX gained 0.69%.

Crude oil futures gained 2.68% at $39.03 per barrel, Brent crude edged up 0.78% at $41.44. Gold futures fell 0.17%.

The euro fell 0.25% at $1.1223 while the pound sterling edge up 0.04% at $1.2426.

The yield on the 10-year Treasury dropped 1.46% to 0.674% while yield on the 30-year Treasury fell 1.87% to 1.418%.