By Tomi Kilgore, MarketWatch
While the number of confirmed cases of COVID-19 and death tolls keep rising, a surprise increase in U.S. jobs and a drop in unemployment in May suggest the worst of the pandemic is over as businesses recover from lockdowns enforced to combat the disease.
Wall Street’s benchmark stock indexes all rose Friday to levels seen before the World Health Organization declared COVID-19 a pandemic on March 11 and sectors hardest hit by shelter-in-place measures enjoyed broad rallies.
Total cases topped 6.75 million worldwide on Friday, and the number of deaths grew to over 395,500, while about 2.9 million people have recovered, according to data aggregated by Johns Hopkins University .
But in a surprise announcement from the U.S. Labor Department, the U.S. economy added 2.5 million jobs last month and the unemployment rate fell to 13.3% from 14.7%, while economists surveyed by MarketWatch had been expecting 7.25 million jobs lost with unemployment rising to 19.0%.
“Today was a shocking jobs number — and for the first time this year it was a positive shock — it’s very encouraging to see workers being recalled back by their employers and the unemployment rate dropped back down in May,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “At 13.3%, we are still at a higher rate than any that we hit during the financial crisis in 2007-2009, but as long as that continues to move lower, it will show that the reopening of the economy is proceeding smoothly.”
Also on Friday, President Donald Trump signed into law a bill easing conditions for small businesses tapping the government’s Paycheck Protection Program.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.87% was up 2.1% Friday afternoon, and surpassed in intraday trading its Feb. 19 record closing price, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.72% climbed 2.6% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.57% ran up 803 points, or 3.1%, with both indexes on track for their highest closes since Feb. 24. The WHO had declared COVID-19 a pandemic on March 11. See Market Snapshot.
A recent beacon of Wall Street’s optimism has been the airline sector. The U.S. Global Jets exchange-traded fund /zigman2/quotes/207744796/composite JETS -3.38% has spiked up nearly 40% this week, a record for the sector tracker. Leading the group higher was American Airlines Group Inc.’s stock /zigman2/quotes/209207041/composite AAL -4.14% , which rose 10% on Friday, after a record one-day rally of 41% on Thursday. The airline said this week it expected flights in July to be more than half what they were during the same month a year ago, compared with a previous announcement of a 70% capacity reduction in June and 80% reductions in April and May. Read more about American Airlines’ stock’s record gain on record volume.
Shares of cruise operators also reflected hopes of a faster recovery, with Norwegian Cruise Line Holdings Inc. /zigman2/quotes/204183397/composite NCLH -3.94% rallying more than 40% this week, Carnival Corp. /zigman2/quotes/202325446/composite CCL -0.62% climbing over 35% and Royal Caribbean Cruises Ltd. /zigman2/quotes/208854639/composite RCL -3.85% rallying nearly 35%.
This optimism has been tempered by those expressing concern about a potential spike in cases in the coming weeks, as nationwide protests of the police killing of George Floyd leave crowds of people ignoring calls for social distancing and as states continue to reopen businesses.
In the face of these concerns, New York City Mayor Bill de Blasio announced Thursday that a second phase of its reopening process, which includes outdoor dining, could begin in early July, about a month after the first phase of reopening, which is set to commence on Monday.
Elon Musk takes aim at Amazon
Tesla Inc. /zigman2/quotes/203558040/composite TSLA -2.23% Chief Executive Elon Musk, who has fought with state officials over lockdown measures, fired off an angry tweet suggesting regulators should break up Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.74% , because monopolies “are wrong!”
The tweet was in response to Amazon rejecting a book that questioned the risk of the COVID-19 pandemic. Amazon said the book was removed in error, and was soon reinstated.
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The U.S. continues to lead the world by a large margin, both in cases of COVID-19, which rose to 1.89 million on Friday, and in deaths, which grew to 108,708. About 485,000 people have recovered, the Johns Hopkins data shows.
Within the U.S., case tolls are still trending higher in nearly half the states , with states including Arizona, Arkansas, Texas and Tennessee seeing new peaks in cases a day.