Wall Street jumps on surprise improvement in labor market

(Reuters) – U.S. stock indexes jumped on Friday, with the Nasdaq Composite less than 1% away from a record high, on hopes of a faster economic rebound from a coronavirus-led slump after data showed surprise job additions in May.

Data from the Labor Department showed nonfarm payrolls rose by 2.509 million jobs last month after a record plunge of 20.687 million in April, and the unemployment rate unexpectedly fell to 13.3% in May from 14.7% in April.

“Today was a shocking jobs number and for the first time this year it was a positive shock,” said Chris Zaccarelli, chief investment officer with Independent Advisor Alliance in Charlotte, North Carolina.

“At 13.3%, we are still at a higher rate than any that we hit during the financial crisis in 2007-2009, but as long as that continues to move lower, it will show that the reopening of the economy is proceeding smoothly.”

The S&P 500 banks sub-index, considered interest-rate sensitive, jumped 5.8% as U.S. Treasury yields rose after the data. [US/]

Boeing Co gained 14.4%, the biggest boost to the Dow Jones index, on hopes of a pickup in air travel a day after American Airlines Group Inc and United Airlines said they would boost their U.S. flight schedule next month.

The NYSE ARCA Airline index also jumped 12.2%.

All major S&P 500 sector indexes rose, with the energy sub-index’s leading gains with a jump of 7.2%, while the defensive consumer staples index added the smallest gains.

Wall Street has rebounded sharply from a coronavirus-driven crash in March as investors bet on a revival in business activity following the easing of a nationwide lockdown.

The S&P 500 and Dow Jones indexes are now down about 6% and 8%, respectively, from their all-time highs.

At 11:09 a.m. ET, the Dow Jones Industrial Average was up 868.73 points, or 3.31%, at 27,150.55, the S&P 500 was up 81.85 points, or 2.63%, at 3,194.20 and the Nasdaq Composite was up 183.41 points, or 1.91%, at 9,799.22.

Fears of more disruptions from social unrest have also eased in the past two days, with the largely peaceful protests against the killing of a black man in police custody waning into Friday morning and emergency curfews in many cities being lifted.

Vaccine maker Novavax Inc jumped 3.7% after saying it would receive up to $60 million from the U.S. Department of Defense to fund manufacturing of its COVID-19 vaccine candidate.

Tiffany & Co jumped 8% after Reuters reported the French luxury goods giant LVMH is not seeking to renegotiate its $16.2-billion takeover deal after deliberating whether to do so.

Advancing issues outnumbered decliners by a 7.13-to-1 ratio on the NYSE and by a 4.24-to-1 ratio on the Nasdaq.

The S&P index recorded 22 new 52-week highs and no new low, while the Nasdaq recorded 70 new highs and one new low.

Source: Read Full Article