Record Unemployment Can't Dent US Market Surge

Major US stock indexes jumped on Friday and logged solid gains for the week after data on historic job losses due to the coronavirus crisis showed they were slightly fewer than feared.

All 11 S&P 500 sectors were positive, led by the beaten-up energy group, which gained 4.3 per cent. A 2.4 per cent gain in Apple shares also lifted the indexes after the iPhone maker said it will reopen a handful of US stores starting next week.

The US economy lost 20.5 million jobs in April, the Labour Department reported. A poll of economists had forecast payrolls diving by 22 million, but the decline still marked the steepest plunge since the Great Depression.

“It’s tough to call the jobs report, which is what everybody was waiting for, anything but a complete calamity, but relative to expectations you can see some silver linings in there,” said Brian Nick, chief investment strategist at Nuveen, pointing to the large number of temporary lay offs.

“Except for the initial panic in the month of March, in general the markets are ignoring economic data for the most part and are looking more at data related to Covid-19,” Nick said.

The Dow Jones Industrial Average rose or 1.91 per cent, to 24,331, the S&P 500 gained 1.69 per cent, to 2,930 and the Nasdaq Composite added 1.58 per cent, to 9,121.

Financial markets on Thursday began pricing in a negative US interest rate environment for the first time, as investors grappled with the economic consequences of the new coronavirus outbreak.

Stocks have staged a sharp rebound since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. The tech-heavy Nasdaq on Thursday erased its 2020 declines and turned positive for the year.

Investors are now watching efforts by a number of states to spark their economies by easing restrictions put in place to fight the outbreak. (Reuters)