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Stocks Rise on Jobs Data 07/02 14:32
Wall Street is rising Thursday after a report showed the U.S. job market
continues to climb out of the crater created by the coronavirus pandemic.
NEW YORK (AP) -- Wall Street is rising Thursday after a report showed the
U.S. job market continues to climb out of the crater created by the coronavirus
pandemic.
The S&P 500 was 0.9% higher in afternoon trading 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 Dow Jones Industrial Average was up 203 points, or 0.8%, at 25,941. The
Nasdaq composite was headed for another record after rising 0.9%. The Russell
2000 index of small company stocks also rose, adding 0.9%.
The indexes were up even more at the start of the day's trading, after the
U.S. government said employers added 4.8 million jobs to their payrolls in June
for the second-straight month of growth. The unemployment rate remains very
high at 11.1%, but 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 the numbers' accuracy. But they say
it's clear that the job market is improving after collapsing in the spring amid
widespread shutdowns. That bolsters investors' hopes that the economy can
recover from its recession relatively quickly as governments relax restrictions.
Such hopes have lifted the S&P 500 to within roughly 7% of the record set in
February, after an earlier nearly 34% drop when recession worries peaked.
"We're starting to see the real economic data say, 'Yes, the recovery is
here, and it's real,'" said Brad McMillan, chief investment officer for
Commonwealth Financial Network.
The next step, he said, is to see the job gains translate into lasting
growth for workers' incomes and for how much they spend.
Worries about the virus are still hanging around, though, and the S&P 500's
gains on Thursday more than halved at one point after Florida reported more
than 10,000 new confirmed cases for the first time. It underlined how fragile
the recovery is, and the bond market was also showing more caution than stocks
as Treasury yields ticked lower.
Many workers across 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 in not just
Florida but across swaths of the U.S. South and West could choke off the
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.
Stocks nevertheless moved higher Thursday, led by companies that would
benefit most from a reopening economy.
Oil companies, raw-material producers 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 1.7%, one of the biggest gains among the
11 sectors that make up the index. Noble Energy jumped 8.4%, and Diamondback
Energy gained 6.4%.
They benefited from hopes that a recovering economy will restore some of the
demand for oil that vanished in the spring as people stopped driving, airplanes
were left parked in the desert and factories went idle. U.S. crude oil rose 83
cents to settle at $40.65 per barrel. Brent crude, the international standard,
added $1.11 to close at $43.14 per barrel.
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 2.8%, France's CAC 40 rose 2.5% and the
FTSE 100 in London added 1.3%.
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