By Geoffrey Smith
Investing.com -- U.S. stock markets surged at the opening on Friday after an expected and large rise in employment in May strengthened hopes that the worst of the coronavirus pandemic was over, and bolstered confidence in a speedy, 'V-shaped' recovery.
By 9:37 AM ET (1337 GMT), the Dow Jones Industrial Average was up 672 points, or 2.6%, at a three-month high of 26,954 points. The S&P 500 rose 2.1% and the Nasdaq Composite was up 1.4%.
The Labor Department had earlier reported that the economy created 2.509 million net jobs in the month to mid-May, causing the jobless rate to fall from its postwar high of 14.7% to 13.3%. Analysts had expected nonfarm payrolls to shrink by 8 million.
"There will naturally be some doubt lingering about these figures given they are telling such a different story to all other data on the labor market, but these are the official ones and on the face of it are fantastic," ING's chief international economist James Knightley said in a research note. "It suggests the American economy can bounce back very vigorously and we all need to massively revise up our economic projections."
The biggest individual gainers were, again, those that had lost the most on the way down, including Hertz Global and Luckin Coffee (NASDAQ:LK), both of which have already filed for bankruptcy protection. Among more viable businesses, American Airlines (NASDAQ:AAL) stock and Occidental Petroleum (NYSE:OXY) stock both rose 23%, the latter helped further by reports that OPEC and its allies will meet on Saturday to confirm a one-month extension to the current deal keeping a total of 9.7 million barrels a day of oil off world markets.
U.S. Crude futures hit their highest in three months on the news, rising as high as $39.55 a barrel before retracing a little to trade at $39.05, up 4.4% on the day.
Boeing (NYSE:BA) stock rose 10.1% while Exxon Mobil (NYSE:XOM) stock rose 7.1%.
Elsewhere, Tiffany (NYSE:TIF) stock rebounded 8.3% after reports that LVMH has decided not to try to revise the terms of its $16 billion deal for the jeweler.
As has been the pattern recently, money was redirected to cyclical stocks (including cruise lines and banks) from tech stocks whose growth profile had made them a safe haven during the worst of the market stress in March and April.
Messaging service Slack suffered particularly after it reported that the boom in working from home hadn't moved its growth needle in the last three months. Slack Technologies (NYSE:WORK) stock fell 16%, while teleconferencer Zoom Video Communications (NASDAQ:ZM) stock fell a more modest 5.1%.