Coronavirus: Stocks Mostly Rise Despite Historical Jobless Claims
Apr. 2--A staggering increase in the number of Americans filing first-time unemployment claims added to the growing uncertainty about how the U.S. economy is handling the coronavirus crisis and led to a mixed early performance from several Bay Area companies in Thursday's stock market activity.
The unemployment figures were so high that they almost defied reality. The U.S. Labor Department said 6.6 million Americans filed for first-time unemployment assistance for the week ending March 28. That number more than doubled the 3.31 million claims that were filed just a week earlier.
In California, the situation was just as negative, with almost 879,000 Californians filing of unemployment insurance last week -- a figure almost five times higher than the number of claims filed for the week ending March 21.
The rapid shutdown of many businesses in California and other states implementing shelter-in-place policies designed to limit social interactions and contain the spread of coronavirus was the primary reason cited for the historical jump in job losses
"To put it bluntly, the U.S. economy went from full speed to full stop and millions of workers were not wearing seat belts," said Josh Lipsky, director of programs and policy, for global business and economics at the Atlantic Council, Washington, D.C.-based think tank. "Across many communities and throughout small businesses the situation is growing more desperate by the day."
Among local companies, Zoom Video Communications was down by 4.3%, at $131.15, after Chief Executive Eric Yuan said the video-conferencing technology company would stop work on any new platform features for 90 days and will focus on improving the privacy and security of its offerings.
San Jose-based Zoom had come under fire for security flaws that could allow hackers to get into video meetings and online classes which had their access statuses set to public. Zoom's usage has soared over the last several weeks as people have used the platform to communicate while under social-distancing guidelines. Zoom said that its daily meeting participants went from a high of 10 million in December to more than 200 million in March.
Tesla shares eked out a small gain to reach $484.79. The electric car company is expected to soon report vehicle delivery and production numbers for the first three months of the year.
Other gains came from Apple, up 0.5%, at $242.19 a share, Intel, which rose 2% to $52.98 a share, Netflix, up by 0.6%, to $366.25 a share and Facebook, which edged up by 0.4%, to $160.32 a share.
The Dow Jones Industrial Average, which fell more than 100 points early, surged by rose by 274 points, or 1.3%, to 21,217.55. The S&P 500 rose by 1.4%, to 2,506.19, and the Nasdaq Composite Index edged up by 1%, to 7,436.36.
Investors turned positive after President Trump said Saudi Arabia and Russia were close to ending a price war over the cost of oil.
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