TOPLINE
The market opened higher on Thursday, despite a continued spike in new coronavirus cases across much of the country, as stocks were boosted by a bigger-than-expected jobs increase last month.
The unemployment rate fell to 11.1% in June.
Spencer Platt/Getty Images
KEY FACTS
The Dow Jones Industrial Average was up 1.7%, over 400 points, on Thursday, while the S&P 500 rose 1.3% and the tech-heavy Nasdaq Composite 1%.
Stocks jumped after a bigger-than-expected increase in jobs last month: The Labor Department reported that 4.8 million jobs were added in June—more than the 2.9 million expected.
The unemployment rate fell to 11.1%, down from 13.3% in May. The jobs data for June was collected in the middle of the month, however, before a spike in new coronavirus cases cropped up across the South and West.
Data on weekly jobless claims, which is more up to date, showed that 1.4 million people filed new unemployment claims for the week ending June 27—slightly more than the 1.3 million expected.
Shares of companies that would benefit from a reopening of the economy—including airlines, cruise stocks and some retailers—all moved higher on Thursday.
The stock market’s recent gains come amid a backdrop of increasing coronavirus infections across the United States: Nearly 50,000 new cases were reported on Thursday alone—another new record.
Many states are now pausing or rolling back reopening plans altogether, amid fears that the country will have to shut down the economy again if the rate of new cases continues.
Crucial quote
“This is yet another sign that our economy is coming back faster than nearly anyone expected,” says Ryan Detrick, senior market strategist for LPL Financial. “The spike in Covid-19 cases could slow things down some going forward, but for now, the stock market only cares about one thing—and that is the reopening.”
Tangent
Shares of Tesla surged another 9% on Thursday, after the electric vehicle maker said it produced over 90,000 cars in the second quarter, far exceeding the 72,000 expected by analysts. Tesla shares hit a record high of $1,135 per share on Wednesday, giving the company a market valuation of $208 billion. That means that Tesla is now the most valuable automaker on the planet, surpassing Toyota, which has a market cap of $203 billion. In fact, Tesla is now worth almost more than many of its rivals combined: Fiat Chrysler ($20 billion), Ford ($24 billion), Ferrari ($32 billion), General Motors ($36 billion), BMW ($41 billion), Honda ($46 billion) and Volkswagen ($74 billion).
Key background
The market finished mostly higher on Wednesday—the first day of the third quarter, with stocks rising on the back of positive coronavirus vaccine news from Pfizer. The S&P rose 0.5% and the Nasdaq gained 1%, while the D0w fell slightly. Stocks closed out their best quarter in decades after finishing higher on Tuesday. The market has bounced sharply from their coronavirus recession lows in late March: The Dow surged 18% in the second quarter, its best quarter since 1987. The S&P jumped over 20% for its best quarter since 1998. Both are still down for the year, however—the Dow by 11% and the S&P by nearly 5%.
Further reading
S&P 500 Jumps 0.5% After Pfizer Coronavirus Vaccine News (Forbes)
The U.S. Added 4.8 Million Jobs In June, But That’s Not The Whole Story (Forbes)
Tesla Is Now The World’s Most Valuable Car Company With A $208 Billion Valuation (Forbes)
The Stock Market Just Had Its Best Quarter Since 1998 (Forbes)
Full coverage and live updates on the Coronavirus