Major U.S. stock indexes jumped on Friday and logged solid gains for the week after data on historic job losses due to the coronavirus crisis showed they were slightly fewer than feared. The TSX also rose, but not by the same vigour as Wall Street, with hefty domestic job losses in April coming in not as bad as the Street expected.
All 11 S&P 500 sectors were positive, led by the beaten-up energy group. The materials and tech sectors of the TSX ended slightly lower, weighing on the Canadian index.
Gains in Apple shares also lifted the indexes after the iPhone maker said it will reopen a handful of U.S. stores starting next week.
The U.S. economy lost 20.5 million jobs in April, the Labor Department reported. Economists polled by Reuters had forecast payrolls diving by 22 million, but the decline still marked the steepest plunge since the Great Depression.
“It’s tough to call the jobs report, which is what everybody was waiting for, anything but a complete calamity, but relative to expectations you can see some silver linings in there,” said Brian Nick, chief investment strategist at Nuveen, pointing to the large number of temporary layoffs.
“Except for the initial panic in the month of March, in general the markets are ignoring economic data for the most part and are looking more at data related to COVID-19,” Nick said.
Unofficially, the Dow Jones Industrial Average rose 1.91% to end at 24,330.77 points, while the S&P 500 gained 1.69%, to 2,929.77.
The Nasdaq Composite climbed 1.58% to 9,121.32.
The S&P/TSX Composite Index closed up 132.87 points, or 0.90%, at 14,966.56.
Financial markets on Thursday began pricing in a negative U.S. interest rate environment for the first time, as investors grappled with the economic consequences of the new coronavirus outbreak.
Stocks have staged a sharp rebound since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. The tech-heavy Nasdaq on Thursday erased its 2020 declines and turned positive for the year.
Investors are now watching efforts by a number of states to spark their economies by easing restrictions put in place to fight the outbreak.
“People are watching closely to just see how this reopening process works,” said Keith Lerner, chief market strategist at Truist/SunTrust Advisory Services.
“On the margin, you are starting to hear businesses say that things are starting to look better from a depressed level.”
Optimism for markets was also fed by news that U.S. and Chinese trade representatives discussed their Phase 1 trade deal, with China saying they agreed to improve the atmosphere for its implementation.
Read more: Stocks that saw action Friday - and why
Reuters, Globe staff