Wall Street on Friday surged after a strikingly upbeat jobs report for last month unexpectedly provided the clearest evidence yet that the US economy is headed for a quicker-than-anticipated recovery.
The NASDAQ breached its all-time closing high reached in February, but pared its gains to end the session a hair’s breadth below it. All three major US stock indices advanced 2 percent or more.
The S&P 500 and the Dow Jones Industrial Average are now 5.7 percent and 8.3 percent below their respective closing records.
The benchmark S&P 500 is now 1.1 percent below its year-to-date break-even level.
The US economy added a remarkable 2.5 million jobs last month, rebounding from April’s record 20.7 million drop, and pushing the unemployment rate down to 13.3 percent.
Analysts saw unemployment soaring to a historic 19.8 percent.
“The numbers are a huge surprise to the upside,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“It would suggest a further confirmation the economy is coming back online,” Arone said. “This is a strong signal that the effects are temporary and that the economy is improving.”
“Long may it last,” he added.
US Treasury yields rose on the jobs data, giving a boost to interest rate-sensitive banks and sending the S&P 500 Banks index up 4.9 percent.
Airlines, among the hardest hit by the COVID-19 crisis, soared, with the ARCA Airline Index jumping 5.7 percent.
However, the WHO warned that the COVID-19 pandemic, which brought the global economy to its knees in the wake of mandated shutdowns, is far from over and new cases are on the rise.
Market participants now turn their focus to the US Federal Reserve, which holds a monetary policy meeting next week where the latest jobs data is almost certain to be discussed.
The Dow on Friday rose 829.16 points, or 3.15 percent, to 27,110.98, the S&P 500 gained 81.58 points, or 2.62 percent, to 3,193.93 and the NASDAQ Composite added 198.27 points, or 2.06 percent, to 9,814.08.
For the week, the Dow rose 6.81 percent, the S&P increased 4.91 percent, and the NASDAQ gained 3.42 percent.
All 11 major sectors of the S&P 500 ended Friday’s session well in the black, with energy, financials and industrials leading the gainers in a continuation of a rotation into cyclicals, which were beaten up amid economic lockdowns.
Small-caps and transportation stocks also outperformed, with the Russell 2000 and Dow Transportation up 3.8 percent and 3.1 percent, respectively.
Boeing Co surged 11.5 percent, giving biggest the blue-chip Dow its biggest boost, on hopes of a pickup in air travel a day after American Airlines Group Inc and United Airlines said that they would boost their US flight schedule next month.
Drugmaker Novavax Inc rose 3.7 percent following its announcement that the US Department of Defense would give it up to US$60 million to manufacture its COVID-19 vaccine candidate.
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