Tuesday, July 23, 2024

Stocks rally on strong jobs gain, heading for weeklong sweep

by Associated Press

NEW YORK (AP) — Wall Street is rallying Thursday after a report showed the U.S. job market continues to climb from the crater created by the coronavirus pandemic in the spring.

The S&P 500 gained1.4% in early trading, 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 for energy.

The Dow Jones Industrial Average rose 397 points, or 1.5%, at 26,132%, as of 9:40 a.m. Eastern time, and the Nasdaq composite was headed for another record after rising 1.3%. The market’s gains were so widespread that all but one stock in the S&P 500 were higher at one point.

U.S. employers added 4.8 million jobs to their payrolls in June, the second straight month of job growth. Even though the unemployment rate is still very high at 11.1%, last month’s improvement was much better than economists expected.

The pandemic has made collecting data on the economy much more difficult, which leaves economists uncertain about how accurate the numbers are. But they say it’s nevertheless clear that the job market is improving after collapsing in the spring amid widescale shutdowns. That gives more credence to investors’ hopes that the economy can pull out of its recession relatively quickly as governments relax restrictions.

Those hopes have helped the S&P 500 climb back to within 7% of its record set in February, after earlier being down nearly 34% when recession worries were at their height.

Of course, many in the county 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 across the U.S. South and West could choke off the budding economic improvements. Such worries have held the market in check since early June following a monthslong rocket ride.

But stocks nevertheless moved higher Thursday, led by companies that would benefit most from a reopening economy.

Norwegian Cruise Line, whose stock has swung viciously with expectations of whether people’s lives will get close to what they were before the pandemic, rose 5.5% for one of the biggest gains in the S&P 500. Other travel-related stocks were also strong, including United Airlines, which rose 4.4%.

Smaller stocks rose more than the rest of the market, which often happens when investors are upgrading their expectations for the economy. The Russell 2000 index of small-cap stocks gained 2%.

Energy stocks had the biggest gains of the 11 sectors that make up the S&P 500, up 2.5%. They benefited from a 1.5% rise for U.S. crude oil to $40.43 per barrel. Brent crude, the international standard, gained 1.5% to $42.64 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.

The yield from on the 10-year Treasury note ticked up to 0.69% from 0.68% late Wednesday.

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 2.6%, France’s CAC 40 rose 2.4% and the FTSE 100 in London added 1.4%.

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