US stocks end higher as beaten-down banking shares gain

After two straight routs, Wall Street stocks finished higher Thursday as beaten-down banking shares rallied despite another spike in jobless claims.

Stocks opened lower, but reversed course at midday and kept rising, with the Dow Jones Industrial Average finishing at 23,625.34, up 1.6 percent or around 375 points.

The broad-based S&P 500 gained 1.2 percent to 2,852.50, while the tech-rich Nasdaq Composite Index advanced 0.9 percent to 8,943.72.

Department of Labor data showed that nearly three million more people applied for unemployment benefits last week, only a modest decline from the prior week's level and a grim reminder of the mounting toll taken by COVID-19 on American workers.

The new data brings the total job destruction since economic shutdowns began in mid-March to 36.5 million, a figure rivaled only by the Great Depression 90 years ago.

"In general, there's a giant tug of war going on," between the recognition of the bad economy and the "tremendous amount of government support, particularly from the Fed," said LBBW's Karl Haeling.

Leading banks enjoyed a positive session, with Bank of America, Citigroup and JPMorgan Chase all piling on more than three percent.

Shares of the sector have underperformed the broader market in recent weeks as the Federal Reserve has cut interest rates and the macroeconomic outlook has deteriorated.

Norwegian Cruise Lines gained 4.3 percent despite reporting a nearly $1.9 billion first-quarter loss, after the company said it had enough access to cash to survive an 18-month period without revenue.