Nasdaq Jumps as Job Gains Firm Up Bets on Economic Rebound
By Yasin Ebrahim
Investing.com – The Nasdaq surged Friday after hitting an intraday all-time high, as unexpected job gains raised hopes for an economic comeback and prompted investors to raise their bets on big tech.
The Nasdaq Composite surged 2.25% to a record high intraday, closing just below its previous all-time high close of 9,817.18 on Feb. 19. The Dow Jones Industrial Average rose 3.15%, or 829 points, and the S&P 500 gained 2.62%.
The U.S. economy generated 2.51 million jobs in May, confounding expectations for a loss of 8 million jobs. The unemployment rate unexpectedly fell to 13.3% in May from 14.7% a month earlier.
Most of the job gains came from sectors that had "experienced the largest declines in March and April: leisure&hospitality, personal services, retail and construction," Jefferies (NYSE:JEF) said in a note. "This is perfectly consistent with the reopening of the economy, which began in late April/early May," it added.
The gains for the tech-heavy Nasdaq was helped by a record close for Apple (NaaASDAQ:AAPL), up 2.8%, as data showed the tech giant's push into services - to offset its dependence on iPhone revenue - is gaining traction.
Credit Suisse (SIX:CSGN) lifted its price target on Apple to $295 from $260, citing ongoing app store momentum in May. Despite a slow start, "stay at home" measures are now translating into a rapid acceleration in App Store revenue, which is up 39% year-on-year in May, the bank said, citing Sensor Tower data.
Google-parent Alphabet (NASDAQ:GOOGL), ended up 1.8%, shrugging off reports that U.S. lawmakers continue to push for the breakup of the tech giant’s ad technology business for potential antitrust violations last year.
Corners of the market tied to the progress of reopening, and ultimately the broader recovery in the economy, also put in a strong performance.
Financials, led by banks, rose 3.9% as the upbeat jobs report added to hopes that credit defaults in the second half of the year may not be as bad as many feared.
Shares of JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) were sharply higher, with the latter up 5.8%.
Travel stocks, meanwhile, were also boosted by growing expectations for a comeback in travel and tourism demand after the Trump administration eased a proposed ban against flights by mainland Chinese airlines to the U.S.
American Airlines (NASDAQ:AAL) rose 11%, Carnival (NYSE:CUK) was up 13.3%, and Boeing (NYSE:BA) was up 11.5%.
Energy jumped 7.5% as oil prices caught a bid on hopes for an extension to the current oil output accord after OPEC decided to bring forward its virtual meeting to Saturday.
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