Stocks Rise on Jobs Data 07/02 15:58
Stocks closed broadly higher on Wall Street Thursday as investors welcomed
a report showing the U.S. job market continues to climb out of the crater
created by the coronavirus pandemic.
NEW YORK (AP) -- Stocks closed broadly higher on Wall Street Thursday as
investors welcomed a report showing the U.S. job market continues to climb out
of the crater created by the coronavirus pandemic.
The S&P 500 rose 0.5%, its fourth-straight gain. The index ended the
holiday-shortened week with a gain of 4%. The Nasdaq composite climbed to
another all-time high, aided by more gains in technology companies. Energy
companies notched some of the biggest gains as oil prices strengthened on hopes
that a recovering economy will mean more demand.
The rally wasn't impervious to worries about the virus outbreak. News that
Florida had another sharp increase in confirmed cases helped cut the S&P 500's
early gains by more than half. The bond market also signaled caution, as yields
moved broadly lower.
A recent surge in new confirmed cases of the coronavirus in Florida, Texas
and several other states has led some governors to halt the reopening of their
economies or to order some businesses, such as restaurants and bars, to
reclose. That has dimmed some of the optimism for a relatively quick economic
turnaround, especially for travel-related sectors like cruise lines.
Even so, investors continue to bet that the recovery will proceed, despite
the worrying rise in new cases.
"Right now, I don't see a national outbreak coming, I don't see a national
shutdown," said Brad McMillan, chief investment officer for Commonwealth
Financial Network. "The risks are still there, but the market has kind of
already taken that into account."
The S&P 500 rose 14.15 points to 3,130.01. The Dow Jones Industrial Average
gained 92.39 points, or 0.4%, to 25,827.36. The Nasdaq climbed 53 points, or
0.5%, to 10,207.63. The Russell 2000 index of small company stocks also rose,
adding 4.55 points, or 0.3%, to 1,431.86. Markets in Europe and Asia also
closed broadly higher.
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
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 8% of the record set in
February, after an earlier drop of nearly 34% when recession worries peaked.
"We're starting to see the real economic data say, ?Yes, the recovery is
here, and it's real,'" McMillan said.
The next step, he said, is to see the job gains translate into lasting
growth for workers' incomes and for how much they spend.
The market's morning gains began to fade 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. 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.
Materials stocks in the S&P 500 rose 1.9%, the biggest gain among the 11
sectors that make up the index. Vulcan Materials led the pack, adding 4.2%.
Energy stocks also notched solid gains. Noble Energy jumped 7.8%.
The energy stocks 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. Benchmark U.S. crude oil for August delivery rose 83 cents to settle at
$40.65 a barrel. Brent crude oil for September delivery rose $1.11 to $43.14 a
Bond investors showed 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.
U.S. markets will be closed Friday in observance of Independence Day.