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Nasdaq Jumps as Job Gains Firm Up Bets on Economic Rebound

Stock Markets Jun 05, 2020 04:15PM ET
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By Yasin Ebrahim

Investing.com – The Nasdaq surged Friday after hitting an intraday all-time high, as unexpected job gains raised hopes for an economic comeback and prompted investors to raise their bets on big tech.

The Nasdaq Composite surged 2.25% to a record high intraday, closing just below its previous all-time high close of 9,817.18 on Feb. 19. The Dow Jones Industrial Average rose 3.15%, or 829 points, and the S&P 500 gained 2.62%.

The U.S. economy generated 2.51 million jobs in May, confounding expectations for a loss of 8 million jobs. The unemployment rate unexpectedly fell to 13.3% in May from 14.7% a month earlier.

Most of the job gains came from sectors that had "experienced the largest declines in March and April: leisure & hospitality, personal services, retail and construction," Jefferies (NYSE:JEF) said in a note. "This is perfectly consistent with the reopening of the economy, which began in late April/early May," it added.

The gains for the tech-heavy Nasdaq was helped by a record close for Apple (NaaASDAQ:AAPL), up 2.8%, as data showed the tech giant's push into services - to offset its dependence on iPhone revenue - is gaining traction.  

Credit Suisse (SIX:CSGN) lifted its price target on Apple to $295 from $260, citing ongoing app store momentum in May.  Despite a slow start, "stay at home" measures are now translating into a rapid acceleration in App Store revenue, which is up 39% year-on-year in May, the bank said, citing Sensor Tower data.

Google-parent Alphabet (NASDAQ:GOOGL), ended up 1.8%, shrugging off reports that U.S. lawmakers continue to push for the breakup of the tech giant’s ad technology business for potential antitrust violations last year.

Corners of the market tied to the progress of reopening, and ultimately the broader recovery in the economy, also put in a strong performance.

Financials, led by banks, rose 3.9% as the upbeat jobs report added to hopes that credit defaults in the second half of the year may not be as bad as many feared.

Shares of JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) were sharply higher, with the latter up 5.8%.

Travel stocks, meanwhile, were also boosted by growing expectations for a comeback in travel and tourism demand after the Trump administration eased a proposed ban against flights by mainland Chinese airlines to the U.S.

American Airlines (NASDAQ:AAL) rose 11%, Carnival (NYSE:CUK) was up 13.3%, and Boeing (NYSE:BA) was up 11.5%.

Energy jumped 7.5% as oil prices caught a bid on hopes for an extension to the current oil output accord after OPEC decided to bring forward its virtual meeting to Saturday.

Nasdaq Jumps as Job Gains Firm Up Bets on Economic Rebound
 

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Comments (25)
luna CC
luna CC Jun 06, 2020 4:13PM ET
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At least here they said the market gain was because of better than expected job report. On fox news, they related the gain with George Floyd and the protesthttps://www.usatoday.com/story/money/2020/06/06/george-floyd-fox-news-sorry-after-graph-shows-market-reaction/3164250001/
John Taylor
John Taylor Jun 06, 2020 2:51PM ET
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All is not as it seems... As per The Washington Post: “When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May. But that would still be an improvement from an unemployment rate of about 19.7 percent for April, applying the same standards.The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.”
John Taylor
John Taylor Jun 06, 2020 2:51PM ET
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Oops... Maybe I shoukd have read the post becore mine first. Sorry buddy!!
Irvin Mermelstein
Irvin Mermelstein Jun 06, 2020 2:01PM ET
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Did you read the jobs report? Did you not see the note at the end of the Report, as reported in the Washington Post? "When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate. "The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May." So, unemployment was up, not down, yet the Market will believe any *****Trump announces. The amount of market capitalization added on Friday by the 800+ point gain in the Dow was entirely fictional. Get your facts straight.
Iam Suleman
YesomiteSam Jun 05, 2020 8:57PM ET
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The difference between consensus and actual of over 10.5M is quite unheard of. Where is hiring taking place because I don't see any Now Hiring sign anywhere.
I2 K4
I2 K4 Jun 05, 2020 8:21PM ET
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Always dubious about these version 1 monthlies that get revised later, and the deep dive I saw noted an increase in permanent job losses with gains coming from recall of employees temporarily laid off, possibly to qualify for biz loan programs - that's troubling.
Irvin Mermelstein
Irvin Mermelstein Jun 05, 2020 8:21PM ET
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Blue smoke and mirrors.
Leo Putra Wijaya
Leo Putra Wijaya Jun 05, 2020 7:44PM ET
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Simply a way to justify the pump. Nothing new guys, move along...
Kapil Baldawa
Kapil Baldawa Jun 05, 2020 7:42PM ET
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Ok, where was Mr. Prez when 19 million jobs were lost n so many ppl died. Just a bit of positive (fake) data n he comes to take all credit for it. Guys, do u Americans still think this guy deserves another term? hope u ppl realise what a loser he is..
Michael Angelo
Michael Angelo Jun 05, 2020 7:21PM ET
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Please review the data and how is calculated. When workers are furlong they are not counted as unemployment and with the Loan to companies and extra 600 many stayed at home. The good thing about this is that from now on I won't believe ANY information coming from the govt because will be wrong and manipulated. Meanwhile we are today better than January (in stocks) with an economy that is 3/4 from that. A completely mess in valuation. Headlines will keep the misgivings.
John Patrick
John Patrick Jun 05, 2020 7:19PM ET
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Job Gains Firm Up 'Bets' on Economic Rebound. The Casino is back...lights flashing and everyones a winner with Fed chips!!
James Doe
James Doe Jun 05, 2020 7:19PM ET
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fed chips are as good as other money. it is their job to fix the economy and fight again those who don't think it's possible. i can't see any wrongdoing from fed
simon meso
simon meso Jun 05, 2020 7:19PM ET
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just a reason to print fresh money. why not if mr dollar pays the check.
James Doe
James Doe Jun 05, 2020 7:19PM ET
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there are such conspiracy which pull us back to the ice age. us/eu financial the money by new bonds and having huge gold reserved. they get paid by us (we pay taxes...), now it is time for them (Fed) to show their value
adriyan sayed
adriyan sayed Jun 05, 2020 6:53PM ET
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great info, hopefull nice monday..
 
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