Dow closes up 469 points on hopes for ceasefire in oil price war

Wall Street’s major stock indexes ended Thursday’s session firmly to the plus side after a choppy trading day that saw shares stumble at the open as investors digested a record-breaking surge in initial jobless claims, only to draft higher after United States President Donald Trump talked up the possibility of a truce in the Saudi-Russian oil price war.

The Dow Jones Industrial Average closed up 469.93 points or 2.24 percent at 21,413.44. The S&P 500 index- a gauge for the performance of US retirement and college savings plans – closed up 2.28 percent while the Nasdaq Composite Index finished the session up 1.72 percent. 

Energy stocks helped lift the major indexes higher after Trump raised hopes of a breakthrough in the oil price war between Saudi Arabia and Russia that has sent crude prices nosediving and threatened the viability of higher-cost US shale oil and gas producers. 

Trump said he had talked to Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, tweeting: “Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!”

Shares of ExxonMobil Corp and Chevron led the Dow higher, gaining  7.64 percent and 11 percent respectively, while the S&P 500 energy sector gained more than 9 percent. 

The possibility of an oil price war truce helped investors scale the wall of worry from coronavirus economic carnage. 

Some 6.65 million people filed for unemployment benefits in the week ending March 28, the US Department of Labor said before the open of trading on Wall Street. That number – spurred by the coronavirus pandemic – annihilated the previous record of 3.3 million initial jobless claims set the week before.   

Thursday’s numbers likely understate the true scale of people who have lost work, given that the self-employed and gig workers only gained eligibility to state and federal unemployment benefits on Friday after Trump signed an historic $2.2 trillion coronavirus relief package into law. Many state unemployment offices have also been overwhelmed by a tsunami of applications.

The labour market snapshot validates the view of most economists that the US is already in recession. Initial jobless claims is the most timely data point for assessing the damage wrought by COVID-19 on the US economy as virus containment measures force businesses to close all over the country, throwing millions out of work.

Boeing Co, once a symbol of US industrial strength, said on Thursday that it would offer buyout and early retirement packages to employees in the face of a near-collapse in global travel demand. Shares of the aerospace giant closed down 5.6 percent.

Southwest Airlines Co closed down 1.68 percent after the company said it intended to file an application with the US Department of the Treasury for aid related to the disruption caused by the coronavirus pandemic. 

US lawmakers passed a record-breaking $2.2 trillion coronavirus relief package last week to help individuals, families, industries, state and local governments and businesses great and small weather the crisis, while the US Federal Reserve has pumped trillions of dollars into the credit markets and innovated new tools to keep financial markets from derailing.

Democratic legislators are drafting plans for a fourth coronavirus-related stimulus bill, while Trump on Tuesday took to Twitter to press for $2 trillion in spending on upgrading the nation’s infrastructure.