Wall Street jumps after surprise job additions in May

Share

The Nasdaq Composite advanced 198.27 points, or 2.1%, to 9,814.08, after hitting a record intraday high of 9,845.69.

The Dow closed just 11.93 points higher on Thursday, halting a rally the peaked yesterday on growing optimism regarding the reopening of several U.S. states. Similarly, the S&P 500 was down by less than 1% after having been down some 30% earlier in the year.

At 10:03 a.m. ET, the Dow Jones Industrial Average was up 684.41 points, or 2.60 per cent, at 26,966.23, the S&P 500 was up 66.68 points, or 2.14 per cent, at 3,179.03 and the Nasdaq Composite was up 157.01 points, or 1.63 per cent, at 9,772.83. The S&P 500 rose 2.6%, or 81.58 points, to 3,193.93.

Many investors in recent months have bet that massive corporations with robust balance sheets will build on competitive advantages and grab market share from smaller rivals struggling to survive the global health crisis.

"We're back", CNBC's Jim Cramer said on "Squawk Box", the financial outlet's morning news and talk show.

Economists polled by Dow Jones expected a drop of more than 8 million jobs and the unemployment rate to almost reach 20 per cent. "I think there were a lot of people who felt that the layoffs would be permanent, and it's obvious that there's so much demand that people have to bring people back". The blue-chip Dow Jones index is about 8% below its own all-time high. "This checks all the boxes for a solid report", said Drew Matus, chief market strategist at MetLife Investment Management.

Ohio Reports 42K New Jobless Claims
While the pace of newly filed applications has slowed, they are still higher than at any point in modern history before the pandemic hit.


As a result of the new jobs report, many now believe that the US' recovery will be closer to the "V-shaped" variety.

Shares of companies that benefit from the economy recovering outperformed on Thursday. "The one thing I'm still cautious on is this incredible optimism trade is being driven without any earnings yet to support it".

Protests across the United States as a result of the death of unarmed African-American man George Floyd at the hands of Minneapolis police officer Derek Chauvin, rising tensions between Washington and Beijing and the ongoing Covid-19 pandemic were all very much so still in focus as well. An astoundingly strong jobs report - showing the economy added jobs in May and the unemployment rate fell - raised hopes of a faster economic rebound.

In Asia, Hong Kong's Hang Seng benchmark rose 1.7% and South Korea's Kospi rallied 1.4%.

That hope has been a big reason for the better than 40per cent rally for the S&P 500 since late March.

Share