The Dow Jones industrial average gained 423.37 points, or 4 percent, to end at 11,143.31. The S&P 500 Index rose by 51.88 points, or 4.6 percent, to 1,172.64. And the Nasdaq Composite Index jumped 111.63 points, or 4.7%, to finish at 2,492.68.
Thursday was one for the record books as it marked the first time in history that the Dow Jones industrial average has experienced 400-point swings for four days in a row, MarketWatch reports. (On Monday the Dow plunged 634 points, on Tuesday it leapt up 429 points, and on Wednesday it fell 519 points.) The Standard & Poor's 500 index has also risen or fallen at least 4 percent each day this week. That has not happened on four consecutive days since November 2008.
Experts said there is a collection of reasons why stocks rose Thursday. Before the markets opened, the U.S. Labor Department said applications for jobless benefits had declined by 7,000 last week to 395,000 — the lowest number of initial claims since early April. “While the economy may not be getting better, jobless claims indicate that the labor market may not be getting worse,” said Dan Greenhaus, chief global strategist at BTIG LLC told MarketWatch.
Also, bargain-hunting investors shopped for stocks Thursday . And investors regained some confidence in Europe after all three leading credit rating agencies reaffirmed that France would keep its AAA credit rating for the time being. In addition, Germany and France, the biggest economies in the euro zone, announced their leaders will meet next week to discuss the financial crisis in Europe, the Associated Press reports.
On Thursday, the VIX index, dubbed the “fear” index because it represents expectations of volatility, was down to 39 from 48 at the beginning of the week, the New York Times reports.
The last time Wall Street experienced a similar series of triple-digit swings was during the financial crisis of late 2008. But that’s where the resemblance ends, some experts say.
“In 2008, the problem was a massive overhang of poorly understood, faulty mortgage-backed securities created and insured by U.S. financial institutions with virtually no reliable collateral,” Peter Morici, a business professor at the University of Maryland, told MarketWatch. “This time, the principal debtors are sovereigns with the capacity to tax and restructure debt.”
European markets had one of their best days in recent weeks after the U.S. market opened higher.