Stocks have moved sharply higher in morning trading on Thursday, extending the upward trend seen over the past few sessions. With the jump, the tech-heavy Nasdaq has reached a new record intraday high.
The major averages have pulled back off their best levels in recent trading but continue to post strong gains. The Dow is up 370.51 points or 1.4 percent at 26,105.48, the Nasdaq is up 140.09 points or 1.4 percent at 10,294.72 and the S&P 500 is up 39.94 points or 1.3 percent at 3,155.80.
The rally on Wall Street comes following the release of a closely watched Labor Department report showing another record spike in employment in the month of June.
The report said non-farm payroll employment skyrocketed by 4.8 million jobs in June after soaring by an upwardly revised 2.7 million jobs in May.
Economists had expected employment to surge up by about 3.0 million jobs compared to the spike of 2.5 million jobs originally reported for the previous month.
The Labor Department also said the unemployment rate dropped to 11.1 percent in June from 13.3 percent in May. The unemployment rate had been expected to dip to 12.3 percent.
The better than expected data has reinforced investor confidence in a swift economic recovery, although a number of economists have pointed out that the employment numbers are still well below pre-pandemic levels.
“The 4.8 million rise in non-farm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “But that still leaves employment 9.6% below its February level and with the spread of the virus accelerating again, we expect the recovery from here will be a lot bumpier and job gains far slower on average.”
Meanwhile, traders have largely shrugged off a separate Labor Department report showing first-time claims for U.S. unemployment benefits fell by much less than expected in the week ended June 27th.
The Labor Department said initial jobless claims dropped to 1.427 million, a decrease of 55,000 from the previous week’s revised level of 1.482 million.
Economists had expected jobless claims to tumble to 1.355 million from the 1.480 million originally reported for the previous week.
The report also showed an increase in continuing claims, a reading on the number of people receiving ongoing unemployment assistance, which climbed by 59,000 to 19.290 million in the week ended June 20.
In other U.S. economic news, the Commerce Department released a report showing the U.S. trade deficit widened more than expected in the month of May amid a steep drop in the value of exports.
Energy stocks have shown a substantial move to the upside in morning trading, benefiting from an increase in the price of crude oil. Crude for August delivery is climbing $0.74 to $40.56 a barrel.
Reflecting the strength in the sector, the Philadelphia Oil Service Index has surged up by 3.4 percent, the NYSE Arca Oil Index is up by 2.8 percent and the NYSE Arca Natural Gas Index is up by 2.6 percent.
Significant strength has also emerged among banking stocks, as reflected by the 3.2 percent spike by the KBW Bank Index.
Steel, airline, housing and chemical stocks are also seeing considerable strength, moving higher along with most of the other major sectors amid broad based buying interest.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index spiked by 2.1 percent.
The major European markets have also shown strong moves to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1.5 percent, the French CAC 40 Index and the German DAX Index are soaring by 2.9 percent and 3.1 percent, respectively.
In the bond market, treasuries have regained ground after an early slump but remain in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1 basis point at 0.692 percent.
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