Stocks rose on Thursday following a better-than-expected U.S. jobs report as the economy tries to recover from the coronavirus pandemic.
The Dow Jones Industrial Average closed 92.39 points higher, or 0.4%, at 25,827.36. The Nasdaq Composite hit a record high, climbing 0.5% to 10,207.63. The S&P 500 also gained 0.5% to end the day at 3,130.01. Boeing contributed to the gains, rising 0.6% after the airplane maker completed recertification flights for its grounded 737 Max jet.
Thursday's gains led to strong weekly performances for the major averages. The Dow rose 3.3% this week and the S&P 500 climbed 4% in the same time period. It was the Dow and S&P 500's biggest weekly gains since June 5. The Nasdaq posited its best weekly performance since May 8, jumping 4.6% this week. U.S. markets will be closed on Friday for the July Fourth holiday.
Record jobs gain
Wall Street started the session with sharp gains after the government reported that a record 4.8 million jobs were created in June. Economists were expecting 2.9 million jobs were created. The unemployment rate fell to 11.1% from 13.3% in May. Economists were expecting a rate of 12.4%, according to Dow Jones.
"Another major surprise here in terms of market expectations," said Christian Scherrmann, U.S. economist at DWS. "What we've seen in May and June is a blueprint for a fast recovery, but only once the virus situation is under control."
Last month, economists forecast a loss of 8 million jobs in May and the economy gained 2.5 million payrolls instead.
The Labor Department also said, however, that initial jobless claims rose by 1.427 million in the week ending June 27. Economists polled by Dow Jones expected initial U.S. jobless claims to rise by another 1.38 million, down from 1.48 million the week earlier. The data also showed the number of continuing claims — the number of people receiving unemployment benefits for consecutive weeks — rose to 19.29 million, an increase of about 59,000.
"There's a disconnect there, when you look at the the two numbers," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, referring to the jobs report and the unemployment claims data. "It does show you there is some distortion in the data ... I don't think the true underlying picture of the labor market will be clear for several months."
Virus cases keep spiking
The major averages cut their gains after Florida reported a one-day spike of more than 10,000 coronavirus cases. The U.S. also reported a record of more than 50,000 cases in one day on Wednesday.
Stocks that would benefit from an economic reopening rolled over. United Airlines and American closed slightly lower after jumping earlier in the day. Cruise operators Carnival, Norwegian Cruise Line and Royal Caribbean were down at least 2.6% each.
"Any piece of news can send us moving pretty quickly one way or the other," said JJ Kinahan, chief market strategist at TD Ameritrade. "You saw that with the Florida news."
"You have to have a note of caution; it's not an all-clear day," he said.