Wall Street closes higher after larger payrolls jump on record

NEW YORK (Reuters) – Wall Street closed higher and the Nasdaq hit a record high on Thursday as investors headed into their long holiday weekend buoyed by a record rise in payrolls, ensuring that the America’s economic recovery was underway. .

FILE PHOTO: Traders Wear Masks While Working on the Floor of the New York Stock Exchange as the Outbreak of Coronavirus Disease (COVID-19) Continues in the Manhattan District of New York, USA, May 27 2020. REUTERS / Lucas Jackson

The top three US stock averages advanced, with the benchmark S&P 500 registering its fourth consecutive daily gain.

Massive stimulus and hopes for a rapid economic rebound have returned the S&P 500 and Nasdaq to 7.6% and 12.6% below their all-time highs reached in February.

The indices posted strong gains for the week.

The US economy added 4.8 million USNFAR = ECI jobs in June according to the Labor Department, 1.8 million more than analysts expected, setting a second consecutive record.

Mass recruitment caused the unemployment rate USUNR = ECI to drop to 11.1%.

“There was a lot to like about the economic data for the week,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “And there is still talk that there will be more stimulus from Washington after they return from the July 4 recess.”

Still, even with record consecutive payroll earnings for May and June, the job market has still recovered only a fraction of the 22 million jobs lost in the March-April decline.

The recovery in the U.S. economy, now in its sixth month of recession, could stall as new COVID-19 cases hit record levels and several states hardest hit by the resurgence halted or reversed plans to reopen their economies.

On Thursday, Florida reported a record 10,000 new cases of the disease, worse than any European country reported at the peak of its outbreaks.

“With the spikes (in the new COVID-19 cases) we have seen the largest states – Texas, California and Florida – those states have taken steps to reverse their reopening plans,” added Nolte. “And that will decrease overall growth and consumer spending in those regions.”

In the coming weeks, market participants will train their focus in the second quarter reporting season. Collectively, analysts now expect S&P earnings to have fallen 43.1% as companies grappled with falling demand and disrupting supply chains.

The Dow Jones Industrial Average .DJI rose 92.39 points, or 0.36%, to 25,827.36, the S&P 500 .SPX gained 14.15 points, or 0.45%, to 3,130.01, and the Nasdaq Composite .IXIC added 53.00 points, or 0.52%, to 10,207.63.

The CBOE volatility index, a barometer of investor anxiety, posted its biggest weekly point drop since the week ending May 8.

Of the top 11 sectors in the S&P 500, all but .SPLRCR real estate and .SPLRCL communications services closed higher, with .SPLRCM materials enjoying the highest percentage gain.

Microsoft Corp (MSFT.O) provided the biggest boost to the S&P 500, and in June it retained its first place as the share with the highest global investment, according to data from the eToro trading platform.

Tesla Inc (TSLA.O) increased 8.0% after electric car maker’s second-quarter vehicle deliveries exceeded Wall Street estimates.

Forward issues outnumbered declining issues on the New York Stock Exchange by a ratio of 1.90 to 1; on the Nasdaq, a ratio of 1.28 to 1 favored the overtakers.

The S&P 500 posted 36 new 52-week highs and no new lows; The Nasdaq Composite recorded 123 new highs and 10 new lows.

Volume on US exchanges was 10.03 billion shares, compared to an average of 13.24 billion in the last 20 trading days.

Reporting by Stephen Culp in New York; Editing by Matthew Lewis

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