Wall Street is rallying Thursday after a report showed the U.S. job market continues to climb from the crater created by the coronavirus pandemic in the spring
By
STAN CHOE AP Business Writer
July 2, 2020, 3:01 PM
4 min read
4 min read
Share to FacebookShare to TwitterEmail this articleNEW YORK -- Wall Street is rising Thursday after a report showed the U.S. job market continues to climb from the crater created by the coronavirus pandemic in the spring.
The S&P 500 was up 1% in morning trading, after earlier being up as much as 1.6%, and on pace for its fourth-straight gain. Stocks also rose across Europe and Asia, while oil prices strengthened on hopes that a recovering economy will mean more demand.
The bond market was still showing caution, though, and Treasury yields were only holding relatively steady.
The Dow Jones Industrial Average rose 242 points, or 0.9%, at 25,977, as of 10:34 a.m. Eastern time, and the Nasdaq composite was headed for another record after rising 1%. More than 90% of stocks in the benchmark S&P 500 index were higher.
U.S. employers added 4.8 million jobs to their payrolls in June, the second-straight month of job growth. Even though the unemployment rate remains very high at 11.1%, last month’s improvement was much better than economists expected.
The pandemic has made collecting data on the economy unusually difficult, which leaves economists uncertain about their numbers' accuracy. But they say it’s clear that the job market is improving after collapsing in the spring amid wide-scale shutdowns. That gives investors hope that the economy can recover from its recession relatively quickly as governments relax restrictions.
Those hopes have lifted the S&P 500 to within 7% of the record set in February, after an earlier nearly 34% drop when recession worries peaked.
Of course, many in the country are still experiencing economic pain, with only about a third of the 22 million jobs lost to the recession recovered so far. And worries are rising that worsening levels of infections across the U.S. South and West could choke off budding economic improvements. Such concerns have held the market in check since early June following a months-long rocket ride.
Thursday's reports on the economy also weren't uniformly encouraging. The number of workers filing for unemployment benefits last week dipped by less than economists expected, for example. The number of workers continuing to get jobless claims was also higher than expected. Factory orders, though, resumed growing again in May.
Stocks nevertheless moved higher Thursday, led by companies that would benefit most from a reopening economy.
Oil companies, raw-material producers, banks and other companies whose profits are very closely tied to the strength of the economy had the market's biggest gains.
Energy stocks in the S&P 500 rose 2.6% for the largest gain among the 11 sectors that make up the index. Noble Energy rose 5.6%, and Apache gained 5.7%.
They benefited from a 0.7% rise for U.S. crude oil to $40.10 per barrel. Brent crude, the international standard, gained 1.7% to $42.76 per barrel.
Smaller stocks rose more than the rest of the market, which often happens when investors are upgrading their expectations for the economy. The Russell 2000 index of small-cap stocks gained 1.7%.
If the S&P 500 stays higher, it will mean the index rose every day this week. Markets will be closed Friday in observance of Independence Day.
Bond investors were showing less enthusiasm, though. The yield on the 10-year Treasury note dipped to 0.67% from 0.68% late Wednesday. It tends to move with investors' expectations for the economy and inflation.
Earlier on Thursday, stocks climbed across Asia. South Korea’s Kospi rose 1.4%, the Hang Seng in Hong Kong jumped 2.9% and the Nikkei 225 in Japan added 0.1%.
In Europe, Germany’s DAX returned 2.9%, France’s CAC 40 rose 2.7% and the FTSE 100 in London added 1.3%.
