Thursday’s Stock Market Close: US Equities Finish Holiday-Shortened Week In The Black On Strong Jobs Data

U.S. stocks climbed higher on Thursday on a surprisingly strong June jobs data, although initial jobless claims climbed last week.

The Dow Jones Industrial Average gained 92.39 points to 25,827.36, while the S&P 500 rose 14.15 points to 3,130.01 and the Nasdaq Composite Index climbed 53 points to 10,207.63.

For the week, the Dow gained 3.24%.

Thursday’s volume on the New York Stock Exchange totaled 3.67 billion shares with 1,811 issues advancing, 90 setting new highs, and 1,147 declining, with three stocks setting new lows .

Active movers were led by Genius Brands International Inc. (GNUS), Nio Inc. (NIO) and Electrameccanica Vehicles Corp. (SOLO).

The Labor Department said on Thursday that nonfarm payrolls surged by 4.8 million in June – much higher than expected -- and the unemployment rate dropped to 11.1% from 13.3% in May as businesses in the U.S. continued to reopen.

“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.”

The Labor Department also said 1.427 million people filed initial jobless claims last week – higher than expected. The number of continuing claims – that is, those who are receiving unemployment benefits for consecutive weeks -- rose to 19.29 million.

But Chris Lu, a former Obama White House official, commented the jobs report should be taken in context.

“Data is from mid-June as states were reopening,” he tweeted. “More than 40% of country is now reversing/pausing reopening. An additional 1.5 million people are filing for unemployment every week. Way too early for any victory lap.”

Lu added: “1.43 million filed for unemployment last week [plus] 840,000 gig workers. 31.5 million people are receiving some kind of unemployment benefit (that's 900,000 more from the week before). This reflects more recent economic condition than monthly jobs report.”

“There’s a disconnect there, when you look at the two numbers [jobs report and the unemployment claims data],” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “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.”

The Commerce Department said on Thursday that factory orders jumped by 8% in May after falling 13.5% in April. However, on a year-over-year basis, factory orders dropped 10.3% in May.

Moreover, covid-19 cases keep spiking.

The U.S. reported more than 50,000 cases on Wednesday alone, while Florida reported more than 10,000 coronavirus cases.

“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.”

Overnight in Asia markets finished higher, as China’s Shanghai Composite index rose 2.13%; Japan’s Nikkei-225 edged up 0.11%; and Hong Kong’s Hang Seng exchange climbed 2.85%.

In Europe markets finished higher, as Britain’s FTSE-100 rose 1.34%, while France’s CAC-40 gained 2.49% and Germany’s DAX jumped 2.84%.

Crude oil futures gained 1.08% at $40.25 per barrel, Brent crude fell 0.93% at $42.74. Gold futures gained 0.44%.

The euro slipped 0.12% at $1.1239 while the pound sterling edged down 0.07% at $1.2466.

The yield on the 10-year Treasury fell 1.91% to 0.669% while yield on the 30-year Treasury slipped 0.28% to 1.429%.