Stocks rallied after picking up steam in the final hour of trading shrugging off earlier losses
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The Dow Jones Industrial Average rose over 299 points or 1.18 percent while the S&P 500 gained 1.1 percent with big financials leading the charge.
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Investors celebrated a rollback in the Volcker Rule, a regulation that blocked financial companies from trading on their own behalf in the wake of financial crisis-era scandals, among other restrictions, named after former Fed Chair Paul Volcker, who developed the plan.
The Nasdaq also jumped over 1 percent reclaiming the 10,000 level with Apple rising despite announcing new store re-closings in Florida, following the same move the company announced in Texas.
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Earlier in the session, stocks struggled as investors weighed upbeat data on U.S. factory orders against spiking weekly unemployment claims that undermined confidence in a recovery from the COVID-19 slowdown.
Big-ticket equipment orders from U.S. factories surged 15.8 percent in May, a sharp turnaround from double-digit slides in each of the two previous months, the Commerce Department reported.
The growth was countered, however, by a larger-than-anticipated rise in the number of people seeking first-time jobless benefits, which reached 1.48 million in the week through June 20, according to the Labor Department. While that was 60,000 fewer than the week before, reflecting the reopening of businesses across the country, it still catapulted the number of positions lost during lockdowns to curb the pandemic's spread to about 47 million.
Still, the growing number of new COVID-19 cases, with infections hitting daily levels last seen at the April height of the pandemic, weighed on equities throughout the day.
While early hot spots like New York and New Jersey have seen cases steadily decrease, the virus is slamming the South and West, with several states setting single-day records, including Arizona, California, Mississippi, Nevada and Texas.
"The dominant theme in the market right now is the durability of the reopening," Tony Roth, who manages more than $80 billion as chief investment officer at Wilmington Trust, told FOX Business.
While the spike in cases has troubled investors, they're not sure whether the economic fallout will be the same as with the earlier cases since the newly-infected patients are skewing younger.
"It's very unclear from an economic standpoint whether this will result in reduced consumer activity or whether, alternatively, a lot of people getting the virus will just basically say, 'You know what, I'm fine, I'm getting a little sick for a week or two but I'll be better,' and life goes on and overall immunity in the community starts to increase," Roth explained.
If infections continue to climb, more economic stimulus from the Federal Reserve is likely, he said, and since many of the states hit hardest this time lean Republican, the GOP-led Senate may see a heightened urgency in responding.
In the Lone Star State, Republican Gov. Greg Abbott temporarily paused the next phases of a reopening plan on Thursday to curb further infections.
"We are focused on strategies that slow the spread of this virus while also allowing Texans to continue earning a paycheck to support their families,” he said in a statement. “The last thing we want to do as a state is go backwards and close down businesses. This temporary pause will help our state corral the spread until we can safely enter the next phase."
Three Northeastern states -- New York, New Jersey and Connecticut -- said a day earlier they would require travelers from states with high infection rates to self-isolate for 14 days upon arrival, and the International Monetary Fund warned the disease has taken a greater toll on the global economy than predicted.
Worldwide, the economy is likely to shrink 4.9 percent this year, worse than the contraction of 3 percent predicted in April, and advanced economies such as the U.S. will take the greatest hit, according to the IMF, an alliance of nations formed after World War II to foster financial stability.
The developments ratcheted up pressure on travel-related stocks, prompting Americans who hadn't already canceled or downgraded summer vacation plans to reconsider. AAA now predicts U.S. residents will take just 700 million trips this summer compared with 828 million a year ago.
Travel via railroads, cruise companies and airlines will tumble more than 70 percent, the organization predicted, and even road trips will slip 3 percent.
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The virus has been blamed for more than 120,000 U.S. deaths — the highest toll in the world — and more than 2.3 million confirmed infections nationwide. On Wednesday, the widely cited University of Washington computer model of the outbreak projected nearly 180,000 U.S. deaths by Oct. 1.
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California alone reported over 71,000 new cases Wednesday and the Walt Disney Company said it would delay the July 17 reopening of Disneyland and California Adventure.
There may also be targeted shutdowns in "individual places or certain stores" across the country, White House economic adviser Larry Kudlow told FOX Business' Maria Bartiromo. "We are keeping a very close eye on this."
The increasing infections kept retailers, who saw a decline in brick-and-mortar shopping during lockdowns, under investor scrutiny. Department-store chain Macy's said it would cut 3,900 corporate and management jobs while shrinking the workforce in its stores.
"COVID-19 has significantly impacted our business," CEO Jeff Gennette said. "While the re-opening of our stores is going well, we do anticipate a gradual recovery of business, and we are taking action to align our cost base with our anticipated lower sales."
In commodities, West Texas Intermediate crude, the U.S. benchmark, rose 1.87 percent to $38.72, while gold was little changed at $1,762 an ounce.
European markets rose, with France's CAC 40 pacing gains at 1.28 percent, while Germany's DAX added 1.08 percent and Britain's FTSE rose 0.53 percent.
In Asia, Tokyo's Nikkei 225 fell 1.2 percent. Markets in Hong Kong and Shanghai were closed for holidays.