The return fire has been backed by massive financial support from the federal government, said Nicole Tanenbaum of Checkers Management Management, allowing investors to look toward an eventual recovery. “Economic data, although still at heavy levels, have begun to show signs of stabilization, which, combined with a better-than-expected season, is further fueling investor optimism despite a highly uncertain background. , “she said.
For individual investors whose stock market exposure is exclusively or partially linked to their 401(k) retirement plans, the recovery marks a return to pre-pandemic levels. “The average 401 (k) holder is feeling pretty good right now,” Michael Farr, president of Farr, Miller & Washington, said in an interview. But he noted the annoying contrast between Wall Street’s flying ambitions and the dire conditions for many businesses and families plagued by the pandemic.
“We have seen this split and break-up that has been disappointing for some investors, where stock prices continue to rise, but economic data and an economic recovery remain redundant,” he said. “You’re coming to the top all the time when they still have 10 percent unemployed – that’s a big deal.”
In the last trading session on Thursday, the S&P 500 fell 6.9 points, or 0.2 percent, to 3,373.43. The Dow dropped 123.85 points, or 0.4 percent, to settle at 27.852.99. The composite Nasdaq composite technique index, which has been rated by tech giants and recently set its own record, advancing 30.26 points, or 0.3 percent, to 11.042.50.
The small losses came as weekly unemployment claims fell below 1 million for the first time in four months, though they remain at historically high levels.
The U.S. Department of Labor reported that 960,000 Americans filed for unemployment insurance last week, up from 1.18 million a week earlier. Prior to the pandemic, the record stood at 695,000, which was set during the 1982 recession. In total, more than 28 million people are receiving some form of unemployment benefits, government data show.
Growing optimism on Wall Street clashes with other data highlighting the devastating effects of the pandemic. Wednesday marked the deadliest day of the summer as the United States recorded nearly 1,500 deaths from bucket-19 – the largest single-day count since mid-May and the final signal that the climb is out of control.
U.S. stocks lost more than a third of their value between February 19 and March 23, when the pandemic began to panic and weeks of wild swings during the day. The stunning turn continues to counter the entrenched recession and stalled efforts in Washington to pass another round of emergency aid.
Instead, investors have focused on aggressive action by the Federal Reserve and the Treasury, which have routed far more financial resources to curb pandemic damage compared to their interventions during the Great Recession. They also found room for optimism in corporate earnings that showed better resilience than expected, and the potential for a covid-19 vaccine.