By Yasin Ebrahim
Investing.com – The Dow rallied into the close Friday, ending positively for the time in three weeks as investors bet on a comeback in the jobs market following data showing a record loss of jobs last month.
The Dow Jones Industrial Average rose 1.91%, the S&P 500 gained 1.69%, while the Nasdaq Composite added 1.58%. The Nasdaq turned positive for the year earleir this week after bouncing off lows seen in March,
Nonfarm payrolls dropped by 20.5 million last month and the unemployment rate surged to 14.7%, according to the Bureau of Labor Statistics. But that was not as bad as many had feared, with economists’ forecasting 22 million jobs lost in April and an unemployment rate of 16%.
The bulk of the job losses were temporary and are expected to return as stay-at-home orders are gradually lifted and businesses start to open, according to Jefferies (NYSE:JEF).
“The good news is that our base case is that employment contracts modestly in May and returns to growth in June as businesses reopen and laid-off workers begin to return to work,” Jefferies said in note. “We think it will take roughly two years to return to pre-COVID19 employment levels.”
The strength of the rally was underscored by a muted reaction to reports that the Trump administration has paused talks on plans to roll out another coronavirus stimulus package as parts of the country begin to gradually lift restrictions that had weighed on economic activity.
Rising energy stocks, meanwhile, led the broader market rally as oil prices settled 5% higher for a second-straight weekly climb amid ongoing hopes that the reopening of economies and output cuts by major oil-producing nations will stem in the glut in crude supplies.
On the earnings front, meanwhile, investors digested mixed quarterly performance from corporates.
Uber (NYSE:UBER) rose 5.91% after the ride-hailing company reported a bigger-than-expected loss, but reassured investors that the Covid-19 pandemic would set its path to profitability back by quarters rather than years.
The company previously said it expected to turn a profit in the fourth quarter of the year.
Roku (NASDAQ:ROKU) fell 8% as it warned growth in its ad business was expected to fall short of its initial expectations and reported mixed first-quarter results amid a surge in costs.
After reporting first-quarter earnings that missed estimates, Walt Disney (NYSE:DIS) climbed 3.4% after it sold out all tickets for the reopening of Shanghai Disneyland on Monday.
Supporting a climb in tech, Apple (NASDAQ:AAPL) rose 2.4% after announcing it would reopen soe stores in four U.S. states starting next week, albeit with restrictions on capacity.
The strong end to the week for stocks came as U.S.-China trade tensions eased, after both sides reportedly said they expected to meet their obligations under the Phase 1 agreement signed in January.
Stocks – Dow Rallies to Snap Two-Week Losing Streak Amid Bets on Jobs Comeback
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