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Stocks Post First Weekly Gain in Three; Bonds Fall: Markets Wrap

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Stocks Post First Weekly Gain in Three; Bonds Fall: Markets Wrap
A trader talks on the phone while working on the floor of the New York Stock Exchange. (Photographer: Michael Nagle/Bloomberg)

(Bloomberg) -- Stocks gained for a second day with investors embracing risk in spite of the biggest monthly loss in jobs in more than 70 years. Yields on Treasuries rose and the dollar weakened.

Shares of energy, industrial and consumer staples companies helped the S&P 500 register its first weekly gain in three. The tech-heavy Nasdaq climbed for a fifth day, bringing this week’s gain to 6%. The latest jobs report showed a cut of 20.5 million workers in April, propelling the jobless rate to 14.7%. While that was the highest since the Great Depression, investors were anticipating the damage and speculating it will mark a low point during the pandemic-fueled economic slump.

“There’s been a sense of optimism around the market that when we get back, things can return pretty well and this helps that optimism,” said JJ Kinahan, the chief market strategist at TD Ameritrade.

Meanwhile, oil posted its first back-to-back weekly gain since February as output cuts from the biggest producers and a nascent recovery in demand began to rebalance a market awash with crude.

Stocks remained higher even after President Donald Trump cast doubt on the future of his “phase one” trade deal with China, saying Friday that he’s struggling with Beijing in the wake of the coronavirus pandemic.

Stocks Post First Weekly Gain in Three; Bonds Fall: Markets Wrap

Building and travel stocks pulled the Euro Stoxx Index higher while U.K. markets were closed for a holiday. Japanese equities led a surge across Asia. Italian bonds climbed before a sovereign ratings decision.

Equities have so far managed to weather miserable economic data as well as a string of poor earnings reports as investors bet on a swift recovery, but the strong rebound in risk assets has left others questioning whether further gains are warranted.

“There had been some concerns that unemployment would hit closer to 25%, so today’s data is in some ways a positive surprise,” said Seema Shah, chief strategist for Principal Global Investors. “Today’s data has been weighing on negative sentiment for several weeks, so just having it out of the way lifts a cloud.”

Stocks Post First Weekly Gain in Three; Bonds Fall: Markets Wrap

Elsewhere, gold declined. Bitcoin briefly rose above $10,000 for the first time since late February.

These are some of the main market moves:

Stocks

  • The S&P 500 Index gained 1.6% to 2,929.80 as of 4:02 p.m. New York time.
  • The Dow Jones Industrial Average climbed 1.8% to 24,331.32.
  • The Nasdaq Composite Index increased 1.5% to 9,121.32, hitting the highest in 10 weeks with its fifth consecutive advance.
  • The MSCI All-Country World Index rose 1.6% to 489.82.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.2% to 1,247.50.
  • The Japanese yen weakened 0.4% to 106.74 per dollar.
  • The euro was little changed at $1.0835.
  • The British pound rose 0.3% to $1.2404.

Bonds

  • The yield on two-year Treasuries gained one basis point to 0.15%, the largest advance in three weeks.
  • The yield on 10-year Treasuries climbed three basis points to 0.67%.
  • Germany’s 10-year yield gained one basis point to -0.54%.
  • Britain’s 10-year yield was unchanged at 0.235%.

Commodities

  • West Texas Intermediate crude gained 4.4% to $24.59 a barrel, the highest in more than two weeks.
  • Gold weakened 0.6% to $1,706.18 an ounce.

©2020 Bloomberg L.P.