US: Stocks rally despite surge in unemployment, Dow up 1.9%

[NEW YORK] Wall Street stocks rallied on Friday as investors shrugged off historically bad jobs data in anticipation of better times as the economy relaunches from coronavirus shutdowns.

The Dow Jones Industrial Average piled on more than 450 points, or 1.9 per cent, to finish at 24,331.32.

The broad-based S&P 500 rose 1.7 per cent to 2,929.80, while the tech-rich Nasdaq Composite Index jumped 1.6 percent to 9,121.32.

The US lost an unprecedented 20.5 million jobs last month, pushing the unemployment rate to 14.7 per cent from 4.4 per cent in March - the highest since the Great Depression of the last century - according to Labor Department data.

As terrible as it was, the figures were not quite as bad as expected.

Analysts also pointed to conciliatory statements from Chinese and US officials following talks, which lessened fears of a revived trade war.

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The stock gains were the latest instance of markets looking at economic reports that are bad, but not significantly different than expected, and instead focusing on positive news such as the gradual restart of economic activity in some parts of the United States and Europe.

Art Hogan, chief market strategist at National Securities, said investors believe the economy will bottom out in the second quarter and improve after that.

"People are anticipating less bad data in the third quarter and good data in the fourth quarter," Mr Hogan said, adding that investors do not expect a second wave of coronavirus cases bad enough to lead to widespread US lockdowns.

The market is thinking "it's got to get better and there's lot of liquidity," he said.

Among individual companies, Uber Technologies jumped 6.0 per cent despite reporting a US$2.9 billion (S$4.11 billion) loss, nearly triple the level of a year earlier.

A bright spot was a 53 per cent rise in Eats restaurant take-away delivery service.

Norwegian Cruise Lines gained 3.6 per cent after announcing it secured over US$2 billion in a variety of transactions that included common equity and debt, enough funds to enable it to withstand over 12 months of voyage suspensions.

But online travel firm Booking Holdings shed 0.9 per cent as it reported a US$699 million loss in the first quarter amid a surge in travel cancelations due to Covid-19.

AFP