Wall Street rallied broadly on Wednesday with the Nasdaq approaching record highs as signs of an economic recovery from mandated shutdowns helped investors look beyond USA social unrest and pandemic worries.
The U.S. economy added a remarkable 2.5 million jobs last month, rebounding from April's record 20.7 million payrolls drop and pushing the unemployment rate down to 13.3%.
At 11:36 a.m. ET, the Dow Jones Industrial Average was up 14.28 points or 0.05% at 26,284.17; the S&P 500 was down 7.23 points or 0.23% at 3,115.64; and the Nasdaq Composite was down 37.95 points or 0.39% at 9,644.96.
American Airlines surged 41.1% for the biggest gain in the S&P 500 after it said it plans to fly 55% of its normal US schedule next month. The SPDR S&P 500 ETF Trust (SPY), climbed 2.83%, the SPDR Dow Jones Industrial Average ETF (DIA) jumped 3.54%, while the Invesco QQQ Trust (QQQ) also advanced 2.11%.
USA official data showed that the latest Initial Jobless Claims declined to 1.877 million (1.843 million expected). Economists polled by Reuters had forecast the jobless rate jumping to 19.8%.
Declining issues almost matched advancers on the NYSE and the Nasdaq.
An unexpected jump in US employment sent world equities surging on hopes that the global economy has started to recover from the coronavirus pandemic, pulling investors out of perceived safe havens like government bonds and gold.
The energy and financial sectors helped Canada's main stock index push higher in late-morning trading, while the loonie continued to soar and topped 74 cents US.
On Wall Street, the S&P 500 rose 1.4% on Wednesday to 3,122.87.
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North American equity markets were firmly in rally mode after surprise jobs gains on both sides of the border. MSCI's broadest index of Asia-Pacific shares outside of Japan rose 0.9%, reversing early losses to stay near a 12-week high. It was the most actively traded stock, with 58 million shares changing hands. The yield on the 10-year Treasury rose to 0.68% from 0.66% late Monday.
Analysts and economists warn, though, that a full recovery is still a long way away.
"This is completely out of expectations", said Subadra Rajappa, head of USA rates strategy in Societe Generale, New York.
Bond investors will get further insight into the likely direction of the economy when the U.S. Federal Reserve holds its regular two-day policy meeting next week. The European Central Bank announced that its pandemic emergency purchase programme will be increased by 600 billion euros to 1,350 billion euros, and the programme's duration will be extended until June 2021 or until it believes the coronavirus crisis is over.
Set for a third straight week of gains, the euro rose to $1.1380, its highest level since March 10 and was on course for a weekly jump of 2.5%.
Tokyo's Nikkei 225 index gained 0.4% to 22,790.65 after opening lower.
Hopes for an economic recovery sent oil prices surging.
In energy markets, benchmark USA crude lost 68 cents to $36.61 per barrel in electronic trading on the New York Mercantile Exchange.