Stocks rise in wake of unprecedented job losses
Stocks rose for a second day with investors embracing risk in spite of the biggest monthly loss in jobs in at least 70 years. The dollar weakened and oil gained.
Shares of energy, industrial and financial companies put the S&P 500 on pace for its first weekly gain in three. The latest jobs report showed a cut of 20.5 million workers in April, propelling the jobless rate to 14.7%. While that was the highest since the Great Depression, investors were anticipating the damage and speculating it will mark a low point during the pandemic-fueled economic slump.
"The jobs report marks a sobering moment in our history, while it also likely marks the bottom of the economic contraction with hope for a better remainder of the year," said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors.
Meanwhile, oil headed for its first back-to-back weekly gain since February as output cuts from the biggest producers and a nascent recovery in demand began to rebalance a market awash with crude.
Stocks remained higher even after President Donald Trump cast doubt on the future of his "phase one" trade deal with China, saying Friday that he's struggling with Beijing in the wake of the coronavirus pandemic.
Building and travel stocks pulled the Euro Stoxx Index higher while U.K. markets were closed for a holiday. Japanese equities led a surge across Asia. Italian bonds climbed before a sovereign ratings decision.
Equities have so far managed to weather miserable economic data as well as a string of poor earnings reports as investors bet on a swift recovery, but the strong rebound in risk assets has left others questioning whether further gains are warranted.
"There had been some concerns that unemployment would hit closer to 25%, so today's data is in some ways a positive surprise," said Seema Shah, chief strategist for Principal Global Investors. "Today's data has been weighing on negative sentiment for several weeks, so just having it out of the way lifts a cloud."
Elsewhere, gold fluctuated. Bitcoin rose briefly above $10,000 for the first time since late February.
Stocks:
- The S&P 500 Index gained 1% to 2,915.15 as of 10:29 a.m. New York time.
- The Dow Jones Industrial Average climbed 1.2% to 24,195.10.
- The Nasdaq Composite Index increased 0.6% to 9,084.85, hitting the highest in 10 weeks with its fifth consecutive advance.
- The MSCI All-Country World Index rose 1.2% to 488.42.
Currencies:
- The Bloomberg Dollar Spot Index decreased 0.1% to 1,246.87.
- The Japanese yen weakened 0.3% to 106.58 per dollar.
- The euro was little changed at $1.0838.
- The British pound was little changed at $1.2425.
Bonds:
- The yield on two-year Treasuries decreased two basis points to 0.12%, the lowest on record.
- The yield on 10-year Treasuries rose one basis point to 0.65%.
- Germany's 10-year yield gained one basis point to -0.54%.
- Britain's 10-year yield increased less than one basis point to 0.235%.
Commodities:
- West Texas Intermediate crude gained 3.8% to $24.39 a barrel.
- Gold weakened 0.2% to $1,718.97 an ounce.
