Stock Market Today: Dow, Nasdaq Fly on Late-Day Surge

A bevy of troubling COVID-related headlines threatened to pull stocks lower Thursday, but stocks made a sudden afternoon push to finish well in the black.

(Image credit: Getty Images)

California, Florida and Texas – America's three most populous states – set new COVID-19 daily case records Wednesday, and Texas temporarily halted its reopening plans. Nevada and Washington state mandated wearing masks in public amid troubling COVID-19 caseloads. Disney (DIS (opens in new tab), -0.6%) is delaying the opening of Anaheim's Disneyland, while Apple (AAPL (opens in new tab), +1.3%) announced it would re-close more than a dozen retail locations in Florida.

The steady stream of negative coronavirus headlines looked like it would sink stocks early Thursday, but investors eventually found reasons to buy.

Weekly jobless claims were yet again lower, at nearly 1.5 million, and continuing claims were better than expected at 19.5 million. News that banking regulators are going to loosen Volcker Rule restrictions propped up financial stocks such as JPMorgan Chase (JPM (opens in new tab), +3.5%) and Bank of America (BAC (opens in new tab), +3.8%), and gave the broader markets a little oomph, too.

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A late-day rally drove the Dow, which had declined by as much as 236 points earlier in the day, 299 points higher – a 1.2% gain to 25,745. The S&P 500 finished up 1.1% to 3,083, the tech-heavy Nasdaq gained 1.1% to 10,017, and the small-cap Russell 2000 closed 1.7% higher to 1,413.

Wall Street is caught in a tug-of-war. On the one hand, improving economic data continues to be wind in the bulls' sails. But action in regular hours and futures alike show that investors aren't exactly ignoring intensifying concerns that states might have to clamp down once again to slow the spread of COVID-19.

"We believe developed market policies for combating COVID-19 are shifting away from lockdowns and towards minimally acceptable strategies such as mask wearing, hand washing and contact tracing," writes Alastair George, an analyst with Edison Investment Research. "Compared to full lockdowns, the economic cost of these policies is significantly reduced. As a result, markets have been rising even as the biological effectiveness of a less intrusive approach remains unproven."

No one knows for certain the direction of the pandemic from here, so the best that investors can do is have a plan for whatever comes their way.

If you believe that Wall Street has priced in far too much optimism about the speed of America's bounce-back, these "bear market" funds (opens in new tab) – which largely outperformed the S&P on the last trip down – could serve as protective positions. If instead you want to stay in high-quality names that should run once the bull market sheds this bout of uncertainty, consider these 20 durable stocks (opens in new tab) that are well-positioned for the current economic environment and have the financial wherewithal to grind through a longer road to recovery.

Another way to play the next bull market, though, is to stack your portfolio with diversified funds whose thin expenses won't make a dent in your future performance. Here, we look at a baker's dozen of low-cost Vanguard funds (some with ETF alternatives) to ensure you're in position to join the next bull run.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.