Stocks rise as Wall Street rebound defies soaring unemployment

Stocks rise as Wall Street rebound defies soaring unemployment
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Stocks opened with gains Tuesday as Wall Street stretches its rebound from the March coronavirus crash despite the deepening economic toll of the pandemic.

The Dow Jones Industrial Average rose roughly 300 points Tuesday morning, climbing 1.3 percent and moving toward a fifth straight day of gains. The S&P 500 index rose 1.2 percent and the Nasdaq composite gained 0.8 percent.

After plunging in March as the spread of COVID-19 across the U.S. accelerated, stocks have gradually recovered toward their averages from late 2018 through early 2019. 

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The Dow lost more than 10,000 points between Feb. 14 and March 20, falling from a record high of 29,398 points to 19,173. The industrial index has since recovered by nearly 5,000 points, settling close to 24,472 points by 9:45 a.m. Tuesday.

The stock market’s rebound comes despite a steadily rising number of Americans who’ve lost their jobs and businesses that are likely to go bankrupt before normal economic activity resumes. As some states begin to relax social distancing orders, stocks have risen under the expectation that the worst is behind the U.S. economy despite warnings from economists of a slow and grueling recovery.

More than 26 million Americans have filed new claims for unemployment insurance since mid-March, according to data released by the Labor Department last week, with several million more likely unable to apply for or disqualified from receiving jobless benefits.

Kevin Hassett, a senior White House economic adviser, said Monday that U.S. gross domestic product, which is used to measure the size and expansion of the economy, would likely sink at an annualized rate up to 30 percent in the second quarter of 2020.

U.S. exports also sunk by 6.7 percent between March and February, including a 17.8 percent drop in automobile exports, according to data released by the Commerce Department on Tuesday.