WASHINGTON (dpa-AFX) - After moving sharply higher early in the session, stocks have seen some further upside over the course of the trading day on Friday. With the rally on the day, the tech-heavy Nasdaq is currently poised to end the session at a new record closing high.
Currently, the major averages are off their highs of the session but holding on to substantial gains. The Dow is up 965.13 points or 3.7 percent at 27,246.95, the Nasdaq is up 206.29 points or 2.2 percent at 9,822.10 and the S&P 500 is up 90.98 points or 2.9 percent at 3,203.33.
The rally on Wall Street comes as the Labor Department's closely watched monthly jobs report seemed to prove traders were right to be optimistic about a quick economic recovery.
The Labor Department said non-farm payroll employment jumped by 2.51 million jobs in May after plummeting by a revised 20.69 million jobs in April.
The record spike in employment came as a shock to economists, who had expected the loss of another 8.0 million jobs following the nosedive of 20.5 million jobs originally reported for the previous month.
Employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade, according to the Labor Department.
The Labor Department claimed the improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus pandemic and efforts to contain the spread of the disease.
James Knightley, Chief International Economist at ING, called the data 'simply astonishing given the slow pace of reopening and the fact that more than 12 million people filed a new unemployment claim during the survey period.'
With the unexpected rebound in employment, the Labor Department said the unemployment rate dropped to 13.3 percent in May from 14.7 percent in April. Economists had expected the unemployment rate to surge up to 19.8 percent.
The unexpected decrease in the unemployment rate came as the household survey found employment soared by more than 3.8 million persons compared to the 1.7 million person increase in the size of the labor force.
However, Knightley said there are 'some oddities in here,' as are the number of unemployed fell by only 2.1 million, suggesting 'new workers appear to have been magicked up out of no-where.'
A note from the Labor Department also revealed the unemployment rate would have been about 3 percentage points higher if not for the misclassification of persons absent from work due to coronavirus-related business closures.
Sector News
Energy stocks have led the broad based rally, benefiting from a sharp increase by the price of crude oil. Crude for July delivery is currently spiking $1.69 to $39.10 a barrel.
Reflecting the strength in the energy sector, Philadelphia Oil Service Index has skyrocketed by 12.3 percent, the NYSE Arca Oil Index has soared by 8 percent and the NYSE Arca Natural Gas Index has surged up by 7.7 percent.
Extending the rally seen in recent sessions, banking stocks have also moved substantially higher, driving the KBW Bank Index up by 5.7 percent. Earlier in the session, the index reached a three-month intraday high.
Significant strength also remains visible among steel stocks, as reflected by the 4.9 percent jump by the NYSE Arca Steel Index. The index has also reached its best intraday level in three months.
Transportation, commercial real estate, housing and networking stocks are also seeing considerable strength, reflecting the broad based buying interest on Wall Street.
Meanwhile, gold stocks are among the few groups bucking the uptrend, with the NYSE Arca Gold Bugs Index plunging by 4.3 percent.
The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, as gold for August delivery is plummeting $46.90 to $1,680.50 a barrel.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index climbed by 0.7 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.
The major European markets also showed significant moves upside on the day. While the French CAC 40 Index soared by 3.7 percent, the German DAX Index spiked by 3.4 percent and the U.K.'s FTSE 100 Index jumped by 2.3 percent.
In the bond market, treasuries are extending the steep drop seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 10.7 basis points at 0.927 percent.
Copyright RTT News/dpa-AFX