Stocks rose Monday morning, pointing to a second straight session of advances.
Shares of airlines, travel and leisure stocks surged, with these stocks buoyed by hopes of reopening the economy. Shares of American Airlines (AAL) rose another 6% Monday morning, following a 77% weekly surge last week, and Boeing (BA) led advances in the Dow. Cruise lines including Carnival (CCL) and Royal Caribbean (RCL) also rose by double-digit percentages, and shares of hotels Hilton (HLT) and Wynn Resorts (WYNN) outperformed the broader market.
An unexpectedly strong May jobs report fueled a stock rally that briefly sent the Nasdaq Composite above its February 19 record high during Friday’s session. The surge added to a weeks-long melt-up in equities, as investors eyed signs that early moves to reopen businesses were bringing back some workers and driving advances in economic activity.
“Nonfarm payrolls unexpectedly rebounded by 2.5mn [million] in May, and the details of the report are consistent with a large and genuine rebound in labor market activity,” Goldman Sachs economists led by Jan Hatzius said in a note. “The unemployment rate declined from 14.7% in April to 13.3% in May, much lower than expected, though the BLS suggested that 16.4% of the workforce remains unemployed after adjusting for a misclassification of workers employed but not at work (down from 19.5% in April).”
“Encouragingly on that front, three quarters of coronacrisis job losers reported being on temporary layoff in May—a positive sign for the strength of the coming labor market recovery,” the economists added. “We expect the unemployment rate to fall further in June.”
Still, at least some economists noted that the unexpectedly strong rebound in the labor market evidenced in the jobs report could discourage lawmakers from injecting further economic stimulus. Others also noted that the distribution of hundreds of billions of dollars via Congress’s Paycheck Protection Program in May could have led to an overstatement of the number of workers brought back on payrolls permanently, with another wave of layoffs a lingering risk once funds from the program run out.
This article was originally posted on finance.yahoo.com/news/.
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