Market Snapshot: Dow futures rise 400 points after strong jobs report despite record rise in daily new coronavirus cases

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U.S. stock futures pointed to sharp gains early Thursday as investors digested a stronger-than-expected monthly employment report amid rising numbers of new coronavirus cases.

U.S. financial markets will be closed on Friday and the bond market will close an hour early at 2 p.m. Eastern time on Thursday with the Independence Day holiday observed on Friday instead of July 4th.

How are benchmarks performing?

Futures for the Dow Jones Industrial Average YM00, +1.71% YMU20, +1.71% were trading 434 points, or 1.7%, higher at 26,009, while those for the S&P 500 index ES00, +1.32% ESU20, +1.32% were up 40 points to reach 3,143, a return of 1.3%. Nasdaq-100 futures NQ00, +1.02% NQU20, +1.02% were climbing 99 points, or 1%, to 10,368.

For the holiday-shortened week, the Dow is set for a 2.9% gain, the S&P 500 is on pace to return 3.6%, while the Nasdaq Composite Index was aiming for a 4.1% weekly return, as of Wednesday’s close of trade.

What’s driving the market

The U.S. added 4.8 million jobs in June compared to expections for a rise of 3.7 million and the unemployment rate fell for the second straight month to 11.1%, but the economy’s recuperation from the coronavirus might already be suffering a setback from a renewed surge in COVID-19 cases.

Millions of Americans have returned to work since the states began to reopen business activity in May, but the economy has a long way to go to get back to normall. The U.S. lost more than 22 million jobs during the height of the pandemic and only restored 7.5 million of them in the past two months.

Meanwhile, in weekly data also published Thursday new applications for traditional jobless benefits continued to slow, falling to .43 million in the seven days ended June 27 from 1.48 million in the prior week. However, the number of people receiving traditional jobless benefits rose 59,000 in the week ended June 20 to 19.29 million.

On Wednesday, Automatic Data Processing Inc.’s private-sector employment report showed the U.S. added 2.37 million jobs in June. More important, ADP raised May’s numbers to reflect that 3.06 million jobs were added rather than the initial report of a loss of 2.76 million jobs.

However, the U.S. saw some 52,000 new COVID-19 cases Wednesday, according to data compiled by Johns Hopkins University, a new one-day record in the U.S. and some states have had to close down business activity again as a result.

In other economic reports on Thursday, a reading of factory orders for May is due at 10 a.m.

Which stocks are in focus?
How are other assets performing?

West Texas Intermediate U.S. crude CLQ20, +1.08% for August delivery rose 0.7%, to $40.08 a barrel on the New York Mercantile Exchange. In precious metals, August gold futures GCQ20, -0.36% slumped $3.80, or 0.2%, to $1,776.10 an ounce, reversing earlier gains, after the jobs reports.

The 10-year Treasury note yield TMUBMUSD10Y, 0.707% was up 2 basis points at 0.697%. Bond prices move inversely to yields.

The greenback fell 0.2% against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index DXY, -0.25%.

In European equities, the Stoxx Europe 600 index SXXP, +1.58% was 1.1% higher, and London’s FTSE 100 UKX, +1.21% was up .7%.

In Asian markets overnight, the Japanese Nikkei NIK, +0.11% edged up 0.1%, Hong Kong’s Hang Seng HSI, +2.85% throttled nearly 3% higher, and the Shanghai Composite Index SHCOMP, +2.13% closed up 2.1%.

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