Wall St. ebbs off as S&P 500 snaps four-day rally

Marco Green
June 6, 2020

Stocks jumped Friday after a report said the USA job market surprisingly strengthened last month, bolstering hopes that the worst of the recession may have already passed. The Dow Jones Industrial Average rose 0.1 per cent to 26,281.82 and the Nasdaq composite fell 0.7 per cent, to 9,615.81.

Traders were keeping a close eye on tensions between the United States and China over the novel coronavirus and trade, as well as the anti-police brutality marches and rallies that have turned violent in some cities.

Continuing a recent trend, investors Thursday were cycling out of stocks that had held up the best when the hunt was for companies that can win in a weak, stay-at-home economy. "It looks like the worst is behind us".

Stocks have now recouped most of their losses after the initial economic fallout from the coronavirus knocked the market into a staggering 34% skid in February and March.

Boeing Co gave the biggest boost to the blue-chip Dow, its shares rising 12.9% following news that billionaire investor Daniel Loeb's Third Point had taken a stake in the company. The yield on the 10-year Treasury rose to 0.71% from 0.68% late Tuesday.

Small caps and transportation stocks also outperformed, with the Russell 2000 and Dow Transportation up 4.7% and 3.9%, respectively.

Shares of airlines jumped, adding to their big gains this week, as the industry added more summer flights.

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. Their profits tend to be very closely tied to the strength of the economy. USA crude rose 12 cents to settle at $37.41 on Thursday. Year-over-year declines have moderated to 85% from 96% in mid-April.

Boeing Co surged 12.2%, giving biggest the blue-chip Dow its biggest boost, on hopes of a pickup in air travel a day after American Airlines Group Inc and United Airlines said they would boost their US flight schedule next month.

Airline stocks such as American Airlines (AAL +41.10%), United Airlines (UAL +16.20%) and Delta Airlines (DAL +13.73%) were top gainers.

Retailers and owners of shopping malls surged on hopes that people may also head back to enclosed stores.

The stocks that had been the steadiest earlier this year when investors were searching for stay-at-home winners, meanwhile, were lagging the market.

Slack Technologies slid 15.6% even though it reported better results for the latest quarter than Wall Street expected.

Netflix, whose subscriber rolls swelled with people hunkering down at home, slipped 0.2%. Clorox, whose disinfecting wipes had been cleared off shelves, was down 3.7%. Germany's DAX lost 0.5%, the U.K.'s FTSE 100 fell 0.6% and France's CAC was down 0.2%.

In other trading, a barrel of USA crude oil for delivery in July fell 5 cents to $37.36 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the worldwide standard, added 4.9% to $41.95 per barrel.

Other reports by Click Lancashire

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