US Stocks Up on Hopes of Quick Recovery
The US stock market traded on a positive note during pre-market trade on Monday. Last week’s upbeat jobs report strengthened hopes for the country’s swift economic recovery from the coronavirus pandemic.
Leading the optimism were shares of companies weighed by the outbreak, including cruise line operators and airlines. Carnival Corp. & plc, Norwegian Cruise Line (NCL) Holdings Ltd., American Airlines Inc., and United Airlines Holdings Inc. gained between 10.6% and 17.5%.
Planemaker Boeing Co. also surged 10.5% and was on track to boost its 40% growth posted in the previous week.
Stocks for major US energy firms supported sentiment as well. Occidental Petroleum Corp., Devon Energy Corp., and Marathon Oil Corp. rose between 9% and 17.5%.
Upbeat US Jobs Report Raises Hopes for Swift Recovery
The Nasdaq Composite index ended Friday’s session near its February 19 all-time high after the latest job data showed a surprising rebound in May.
The blowout jobs report has got economists talking about V-shaped recoveries, according to research head Jasper Lawler.
The US Labor Department stated, on Friday, that employers added 2.5 million jobs last month, while unemployment rate dropped to 13.3% from 14.7% in April.
While unemployment numbers remained higher than in any past postwar recession, employment figures were able to defy economists’ expectations and raised hopes for a faster economic recovery in the US.
The S&P 500 and the Dow were now 5.7% and 8.3% below their respective closing records. Both stock indexes have risen over 45% from their pandemic-driven lows registered on March 23. Most businesses have now resumed operations after weeks of suspension due to the spread of COVID-19.
The S&P 500 is also about 1% away from regaining all its losses in 2020.
Investors’ focus is on the Federal Reserve’s two-day policy meeting where the latest jobs data is likely to be discussed.
The meeting, which will end on Wednesday, would be the first assembly since April when Fed Chair Jerome Powell stated that the US economy may feel the weight of the economic shutdown for more than a year.
Dow e-minis also gained 0.84%, while S&P e-minis inched up 0.35%, and the Nasdaq e-minis advanced 0.08%.
Stock trading in US biotech group, Gilead Sciences Inc., was up 3.9% in pre-market hours, driven by news of a possible merger with British-Swedish pharmaceutical company AstraZeneca plc. The potential partnership could lead to the establishment of the world’s biggest drug companies.
Car giant Tesla Inc. edged higher by 3.4% after China sales of its Shanghai-produced Model 3 vehicles more than tripled in May, compared with April.
