Wall Street rose on Thursday, with the Nasdaq hitting an all-time high, after a record-setting increase in monthly U.S. jobs pointed to a rebound in business activity following the easing of coronavirus-led lockdowns.
The U.S. economy created 4.8 million jobs in June, the most since the government began keeping records in 1939, but layoffs remained elevated and market gains were capped by another spike in new virus infections.
Florida reported more than 10,000 new cases on Thursday, the biggest one-day increase in the state since the pandemic started, creating even more skepticism around a V-shaped economic recovery.
“A lot of people who are just looking at the economic data and ignoring the COVID data are setting themselves up for a problem,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.
“If you are respectful of the COVID risk, that doesn’t require a drastic market sell-off, but it requires you to pause from hitting the buy button like crazy.”
The jobs report comes at a time when there has been a flare up in infections, which started in late June, and the unemployment rate is at risk of remaining in double digits, as several states pause reopenings and send workers back home.
Still, hopes of aggressive U.S. stimulus ushering a quick economic rebound and the possibility of a vaccine have fueled a Wall Street rally since April, with the benchmark S&P 500 now just about 7% below its February record high.
The Nasdaq and S&P 500 were also boosted on Thursday by a 1.5% rise in shares of Microsoft Corp. The tech giant was the most invested in stock globally on the eToro trading platform in June.
Investors are now looking ahead to the quarterly earnings season, which kicks off in mid July, for signs of the hit to corporate America in the latter half of the year.
Earnings for S&P 500 companies are expected to have plunged 43% in the second quarter, according to Refinitiv data, while third-quarter profits are expected to tumble 25%.
“The market wants to hear the recovery story, they don’t want to hear about how much damage has happened,” Zigmont said.
At 1:12 p.m. ET, the Dow Jones Industrial Average was up 240.71 points, or 0.94%, at 25,975.68, the S&P 500 was up 29.61 points, or 0.95%, at 3,145.47. The Nasdaq Composite was up 109.31 points, or 1.08%, at 10,263.94.
Ten of the 11 major S&P sectors were trading higher, with gains being led by energy stocks.
Tesla Inc jumped 7.3% after beating Wall Street estimates for second-quarter vehicle deliveries.
Advancing issues outnumbered decliners for a 3.00-to-1 ratio on the NYSE and a 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and no new low, while the Nasdaq recorded 109 new highs and 8 new lows.