US Stocks Rally on Strong Jobs Data; Nasdaq Hits Record High
Better thanexpected U.S. job growth in May boosts investor confidence, lifting major indexes and driving gains in airline, oil and financial stocks.
The Nasdaq shot up 231.50 points (1.2%) to 19,529.95, the Dow surged 443.13 points (1.1%) to 42,762.87 and the S&P 500 jumped 61.06 points (1%) to 6,000.36.
Labor Departments report showed slightly stronger than expected U.S. job growth in the month of May. Also, it mentioned that the non-farm payroll employment shot up by 139,000 jobs in May after jumping by a downwardly revised 147,000 jobs in April. The report said the unemployment rate came in at 4.2% in May, unchanged from the previous month and in line with economist estimates. The modestly bigger than expected increase in employment helped offset concerns about the strength of the economy following some recent downbeat data.
Airline stocks substantially moved upwards, with the NYSE Arca Airline Index soaring by 3.2%. A sharp increase by the price of crude oil also contributed to significant strength among oil service stocks, driving the Philadelphia Oil Service Index up by 2.2%. Financial, oil producer and biotechnology stocks also saw considerable strength while gold stocks bucked the uptrend amid a steep drop by the price of the precious metal.
Asia-Pacific stocks turned in another mixed performance. Japan's Nikkei 225 Index rose by 0.5%, while Hong Kong's Hang Seng Index fell by 0.5%. The major European markets also ended the day mixed while the German DAX Index edged down by 0.1%, the French CAC 40 Index crept up by 0.2% and the U.K.'s FTSE 100 Index rose by 0.3%.
In the bond market, treasuries moved sharply lower in reaction to the better than expected U.S. jobs data. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, surged 11.6 bps to 4.51%.
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