Surprise job additions in May boost US market

Bengaluru/Gdansk — US stock indices jumped on Friday, with the Nasdaq Composite less than 1% away from a record high, after a closely watched report showed surprise job additions in May, lending weight to hopes of a faster economic rebound from a coronavirus-led slump.

Data from the labour department showed nonfarm payrolls rose  2.509-million jobs last month after a record plunge of 20.687-million in April, while the unemployment rate unexpectedly fell to 13.3% in May from 14.7% in April.

“It’s shocking, it’s a refreshing thing to experience, a very positive and a far better-than-expected report,” said vice-president of trading and derivatives for Charles Schwab in Austin, Texas, Randy Frederick.

“The unemployment rate was likely to peak in May and then get better from there, but it looks as though it might have peaked in April, which is a very positive development for the economy.”

The S&P 500 banks subindex, considered interest-rate sensitive, jumped 4.8% as US treasury yields rose after the data.

Boeing gained 9.2%, the biggest boost to the Dow, on hopes of a pickup in air travel a day after American Airlines and United Airlines said they would boost their US flight schedule in July.

The New York stock exchange ARCA Airline index also jumped 12.9%.

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 are now down about 6% and 9%, respectively, from their record highs.

At 10.03am in the US, the Dow was up 684.41 points, or 2.60%, at 26,966.23, the S&P 500 rose 66.68 points, or 2.14%, to 3,179.03 and the Nasdaq Composite 157.01 points, or 1.63%, to 9,772.83.

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

Vaccine maker Novavax jumped 7.2% after saying it would receive up to $60m from the US department of defence to fund manufacturing of its Covid-19 vaccine candidate.

Apparel retailer Gap fell 4.5% as it reported a quarterly loss of nearly $1bn due to coronavirus-induced store closures.

The S&P index recorded 18 new 52-week highs and no new lows, while the Nasdaq recorded 56 new highs and no new lows.

Reuters