US STOCKS-Wall St rallies for third day as job losses stir talk of more stimulus

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* Weekly jobless claims rise to record 3.28 mln
* Airlines surge on $58 bln industry aid package
* S&P 500 set for third straight session of gains
* Indexes jump: 3.96%, S&P 3.73%, Nasdaq 3.17%

(Updates to early afternoon)
By Uday Sampath Kumar and Medha Singh
March 26 (Reuters) - Wall Street surged on Thursday as
record weekly jobless claims came in below investors' worst
fears, while also making a strong case for more aggressive
stimulus to aid businesses and families wrecked by the economic
fallout of the coronavirus pandemic.
The number of Americans filing claims for unemployment
benefits surged to 3.28 million last week as state-wide
lockdowns brought the economy to a halt and unleashed a wave of
layoffs. The median of analysts polled by Reuters was 1 million
claims, but the top end of the forecast was as high as 4
million.
"This is the first alarming data print, but the whisper
number was probably higher than that so it does seem like
there's a little bit of relief in the market," said Shawn
Snyder, head of investment strategy at Citi Personal Wealth
Management in New York.
Adding to 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. "He said the Fed is not going to run out of ammunition and
that the committee still has policy room for more action," said
Charalambos Pissouros, senior market analyst at JFD Group in
Cyprus.
"By saying that he raises the question - will they go for
negative interest rates?"
Expectations are high for the U.S. House of Representatives
to pass a $2 trillion stimulus bill to support distressed
industries, including airlines, after the Senate cleared the
proposal. The S&P 500 has now clawed back about $3 trillion in market
value since its close on Monday and is on pace for its third
straight daily increase for the first time since the selloff
began in late February.
But with macroeconomic indicators likely to worsen heading
into the second quarter as a breakdown in business activity and
fears of corporate defaults foreshadow a deep global recession,
analysts expect more wild swings in markets.
The CBOE volatility index .VIX fell 4.5 points on
Thursday, but was still near levels far above those in 2018 and
2019.
United Airlines UAL.O , American Airlines AAL.O and Delta
DAL.O rose between 7% and 13%, while Boeing BA.N rose 15% to
build on a strong rally this week, boosted by a $58 billion
provision for the aerospace industry in the latest aid bill.
At 1:22 p.m. ET, the Dow Jones Industrial Average .DJI was
up 839.23 points, or 3.96%, at 22,039.78, while the S&P 500
.SPX was up 92.45 points, or 3.73%, at 2,568.01. The Nasdaq
Composite .IXIC was up 234.08 points, or 3.17%, at 7,618.37.
Advancing issues outnumbered decliners more than 6-to-1 on
the NYSE and 4-to-1 on the Nasdaq.
The S&P index recorded no new 52-week high or low, while the
Nasdaq logged four new highs and 11 new lows.