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Stocks - Wall Street Opens Higher as Stimulus Hopes Outweigh Jobless Surge

By Geoffrey Smith -- U.S. stock market opened higher on Thursday, weighing the biggest-ever weekly surge in initial jobless claims against the prospect of the U.S.’s biggest-ever stimulus package being signed into law by the end of the week.

By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 402 points, or 1.9% at 21,602. The S&P 500 was up 1.9% and the NASDAQ Composite was up 1.8%.

The indices had posted their first back-to-back gains in six weeks on Wednesday in anticipation of the $2 trillion stimulus package drafted by the Senate coming into law by Friday. The bill, which earmarks some $540 billion for payments to households and $1 trillion in loans to businesses, state and local governments, passed 96-0 in the upper house, lifting hopes that there will be no further delay.

The Bureau of Labor Statistics said Thursday that 3.283 million Americans filed for unemployment benefit last week, twice the expected 1.65 million, as companies across the country laid off workers due to the Covid-19 epidemic.

That’s over 1% of the entire U.S. population, over 2% of a workforce measured last month at 164.6 million. For comparison, 5.8 million people were registered as unemployed in February.

“Sadly, this isn't peak as many more layoffs occurred in recent days,” Greg Daco, U.S. economist with Oxford Economics, said via Twitter. He said unemployment was likely to surge well above 10% in April. St. Louis Fed President James Bullard had said at the start of the week that the jobless rate could hit 30% in the second quarter as the virus peaks.

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