Stocks Jump After Jobs Report Buoys Recovery Bets: Markets Wrap

(Bloomberg) -- U.S. stocks jumped and Treasuries fell after a jobs report that far surpassed analysts' forecasts bolstered expectations for the economy to rebound quickly from coronavirus lockdowns.

The S&P 500 Index rose 2.6% and posted a third weekly advance, leaving the gauge up more than 40% from its March low. Benchmark Treasury yields rose to an 11-week high. Oil jumped, gold fell and the dollar slumped following data that showed a drop in unemployment and surge in payrolls last month, signaling the economy is picking up faster than anticipated from the virus-inflicted recession.

The tech-heavy Nasdaq Composite underperformed but still set an intraday record. Airlines, automakers and banks soared, signaling that investors are rotating away from the beneficiaries of the stay-at-home economy and into shares that will do well when more normal activity resumes.

While the unemployment rate at 13.3% is still shockingly high by historic standards, markets are riding a wave of enthusiasm as investors bet on a global economy awash with stimulus. Fiscal and monetary aid measures from Frankfurt and Berlin exceeded expectations this week, and reports showed that Trump administration officials expect to spend as much as $1 trillion in the next round of aid.

The jobs report “is a big surprise and good one,” said Kathy Jones, chief fixed-income strategist for Schwab Center for Financial Research. “All of this is subject to a lot of revision and recalculation, but the trend indicators would suggest that as states reopen we're getting people back to work and that's a good sign for the economy.”

With this week's 4.9% gain, the S&P 500 is close to wiping out its losses for the year, even after the coronavirus pandemic killed more than 100,000 Americans and left many more collecting unemployment. The Nasdaq Composite has climbed almost 10% since the end of December.

“Today was a shocking jobs number -- and for the first time this year it was a positive shock,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “Unemployment is still extremely high at 13.3%, but at least it's coming down.”

Oil posted its sixth weekly gain after OPEC+ reached a tentative agreement to extend record production cuts.

In Europe, airlines, automakers and hotels led gains in equities as investors scooped up beaten-up shares. The Stoxx 600 Index posted its best week in two months. Asian stocks were up more than 5% on the week, led by financial shares.

Here are the major moves in markets:

Stocks

• The S&P 500 Index climbed 2.6% at the close of trading in New York.
• The Stoxx Europe 600 Index rose 2.5%.
• The MSCI Asia Pacific Index increased 0.7%.
• The MSCI Emerging Market Index gained 1.5%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%.
• The euro fell 0.4% to $1.1293.
• The British pound rose 0.6% to $1.2666.
• The Japanese yen weakened 0.4% to 109.63 per dollar.

Bonds

• The yield on 10-year Treasuries jumped seven basis points to 0.89%.
• Germany's 10-year yield increased five basis points to -0.28%.
• Britain's 10-year yield rose five basis points to 0.35%.

Commodities

• West Texas Intermediate crude increased 5.2% to $39.36 a barrel.
• Gold weakened 1.8% to $1,682.94 an ounce.

©2020 Bloomberg L.P.