The New York Stock Exchange continued its winning streak on Thursday, after investors welcomed the possible divided control of Congress after the November 3 elections.
Wall Street's leading stock indicator,
the Standard and Poors 500 Index, posted a 2.3% gain
, the biggest it has posted in a week since April.
The markets are betting that Tuesday's election will lead to a divided Congress - with a Democratic majority in the House of Representatives and a Senate retained by Republicans - that would keep big business tax benefits, low taxes and few regulations.
Claims for unemployment assistance reached 751,000 last week in the US.
Nov. 5, 202000: 18
The electoral contest between President Donald Trump and former Vice President Joe Biden has yet to reach a resolution.
As the count continues in five states
, Biden is approaching the 270 Electoral College votes needed for victory
and the Republican campaign presents legal challenges.
The Dow Jones industrial average rose 592 points, or 2.1%, to 28,438, and the Nasdaq index was up 2.9%.
Small business stocks are also doing well.
The Russell 2000 Small Cap Index was up 2.8%.
[Requests for unemployment assistance grow by 750,000 but the stock market rises and hopes of an aid plan remain]
Apple, Microsoft, Amazon, Facebook and Google's parent company increased between 1.1% and 3.6%.
They are the top five stocks in the S&P 500 by market value.
Interest rates at an all-time low close to zero
Gains in the stock market were also driven by the announcement by the Federal Reserve, the autonomous body in charge of the country's monetary policy, that its interest rate will hit a record low close to zero.
Although the Federal Reserve, the name given to the US central bank, did not present new actions to combat the crisis caused by the coronavirus pandemic, it left the door open for more help in the coming months,
amid a new wave of COVID -19
.
[Applications for unemployment assistance are falling but it is misleading: "The labor market is far from safe"]
The economy has not been able to recover from the crisis that began in early spring
, although it has shown some signs of improvement.
"I think we have to be humble about where we are," central bank chairman Jerome Powell said when asked at a news conference if the economy was at risk of being severely affected.
"We are a long way from saying we have this and removed," he said referring to the risks.
Several Federal Reserve officials have expressed
concern that Congress has not approved more financial aid
for struggling individuals and businesses.
In April, congressmen approved a multi-trillion dollar economic stimulus, which included direct checks for $ 1,200 and funds for the crisis unemployed and businesses.
Although this aid has been exhausted - and despite the fact that both experts and politicians agree on the need for a new economic package - negotiations between the two parties and the White House have remained stagnant.
"The outlook for the economy is extraordinarily uncertain," Powell said at the news conference.
The central bank has been buying Treasuries and mortgage bonds to
keep long-term loan rates low and encourage spending
.
And it has kept its interest rate close to zero, which in the short term helps reduce the cost of corporate and individual loans.
The latest central bank policy meeting came amid a spike in coronavirus cases and hospitalizations across the country.
Most economists warn that
the economy cannot have a sustained recovery until the pandemic is under control
and most Americans are confident enough to return to their normal habits of shopping, traveling, dining, and gathering in groups.
"The recent increase in COVID-19 cases, both here and abroad, is particularly concerning," Powell said.
"We all have a role to play, maintaining proper social distance and wearing masks in public."
With information from The Associated Press.