The bulls are back

The Dow Jones has recorded its shortest bear market in the index's history, as investors regain confidence in a market rife with volatility.

The Dow experienced its strongest three days in nine decades after record weekly US jobless claims came in below worst fears and the focus stayed on the US$2 trillion stimulus awaiting approval by the US House of Representatives, according to Morningstar.

The stimulus package reportedly includes US$500 billion to fund industries impacted by COVID-19, US$350 billion in small business loans, US$250 billion in aid for those out of work, US$75 billion for hospitals and payments of up to US$3000 for families.

The Dow finished up 21% from its Monday low, establishing it in a bull market. It was the index's strongest three-day percentage increase since 1931.

As well as the Dow, the S&P 500 index logged a third straight day of gains for the first time since mid-February, before coronavirus fears stopped Wall Street's 11-year bull market.

Since the start of the week the S&P 500 has surged about 17%, however it is still down 22% from its February 19 record high.

Adding to the upbeat sentiment, Federal Reserve chair Jerome Powell said the central bank stood ready to act 'aggressively' to shore up credit in the market on top of the unprecedented policy easing announced on Monday.

Morningstar said many analysts expect more wild market swings, with macroeconomic indicators likely to worsen heading into the second quarter.

This may come as a breakdown in business activity and fears of corporate defaults foreshadow a deep global recession.

The CBOE volatility index fell 2.9 points, but was still at levels far above those in 2018 and 2019.

Read our full COVID-19 news coverage and analysis here.

Read more: Dow JonesMorningstarS&P 500CBOEFederal ReserveJerome PowellUS House of RepresentativesWall Street
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