April 23, 2020 / 6:08 PM / a month ago

US STOCKS-Wall St rises on hopes worst for labor market is over

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* U.S. weekly jobless claims fall for third straight week

* Gilead’s coronavirus drug flops in first trial - FT

* House set to pass $484 bln more in coronavirus relief

* U.S. business activity hits fresh record lows

* Indexes up: Dow 0.57%, S&P 500 0.39%, Nasdaq 0.41% (Adds comments, updates prices to early afternoon)

By Shreyashi Sanyal and C Nivedita

April 23 (Reuters) - Wall Street rose on Thursday as a third straight decline in weekly jobless claims raised hopes the worst of the coronavirus pandemic’s impact on the labor market was over, while energy stocks jumped on a rebound in oil prices.

The three main indexes, however, pared some gains by early afternoon after the Financial Times reported that Gilead Science’s experimental antiviral drug for the coronavirus flopped in its first randomized clinical trial.

“It is just another dent in the hope that something is going to come along relatively quickly to help solve this problem,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

Supporting the upward move was data that showed weekly U.S. jobless claims fell to 4.43 million from a revised 5.24 million. However, the numbers were still staggering, taking the total in the past five weeks to a record 26 million and wiping out all the jobs created since the financial crisis.

“The decline in initial jobless claims is encouraging, but the damage has already been done with the insured unemployment rate surging to a record high in the (previous) week,” said Paul Ashworth, chief U.S. economist at Capital Economics.

The energy index gained the most among the 11 S&P 500 sectors as oil prices recovered in a tumultuous week that saw U.S. crude futures crash below zero for the first time in history.

U.S. stock indexes have rallied this month on a raft of global stimulus, but the benchmark S&P 500 remains more than 15% below its record high as worsening economic indicators foreshadow a deep global recession.

A survey showed U.S. business activity plumbed new record lows in April, mirroring dire figures from Europe and Asia as strict stay-at-home orders crushed production, supply chains and consumer spending.

Still, the mood was risk-on with the only decliners among S&P 500 sub-indexes being defensive utilities, real estate and consumer staples.

The CBOE volatility index has retreated from 12-year peaks hit last month, but remains well above levels seen in the past two years and analysts have warned of another selloff as corporate America issues worrying forecasts for the year.

Meanwhile, Congress was preparing nearly $500 billion more in aid for small businesses and hospitals, which is expected to clear the House of Representatives later in the day.

At 01:30 p.m. ET the Dow Jones Industrial Average was up 133.50 points, or 0.57%, at 23,609.32, the S&P 500 was up 10.94 points, or 0.39%, at 2,810.25.

The Nasdaq Composite was up 34.77 points, or 0.41%, at 8,530.15.

A 11.9% jump for Las Vegas Sands Corp lifted U.S. casino operators after the company predicted a speedy recovery in Asia on pent-up gambling demand.

Shares in Wynn Resorts, MGM Resorts and Melco Resorts gained between 4.7% and 8%.

Advancing issues outnumbered decliners by a 2.25-to-1 ratio on the NYSE and by a 1.85-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and one new low, while the Nasdaq recorded 29 new highs and 11 new lows. (Reporting by Shreyashi Sanyal and C Nivedita in Bengaluru; Editing by Sagarika Jaisinghani, Arun Koyyur and Anil D’Silva)

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