Wall Street set to open higher as job growth picks up pace in June
July 2, 2020
By Pawel Goraj and Devik Jain
(Reuters) – Wall Street was set to open higher on Thursday as data showed the U.S. economy added jobs at a record pace in June, the latest signal of a rebound in business activity following the easing of coronavirus-led lockdowns.
Nonfarm payrolls rose by 4.8 million jobs in June, the Labor Department’s closely watched monthly employment data showed, the most since the government began keeping records in 1939, although a recent surge in COVID-19 cases has threatened the fledgling recovery.
Optimism about a post-pandemic rebound in business activity, aggressive U.S. stimulus and hopes of a COVID-19 vaccine have fueled a Wall Street rally since April, with the Nasdaq notching up its sixth record closing high since early June on Wednesday.
“What we’re seeing from the payroll report is that the labor markets are healing, or at least had been healing in May and June,” said Patrick Leary, chief market strategist at Incapital in Minneapolis.
“(But) these numbers don’t take into consideration a possible second wave, which is what has markets nervous right now.”
Several states are scaling back or pausing reopenings to tackle the spike in infections and analysts have warned of another selloff in financial markets if the damage to Corporate America mounts.
Third-quarter earnings for S&P 500 companies are now expected to tumble 25%, compared with a forecast of a 2.7% drop on April 1, according to Refinitiv data. In the second quarter, earnings are forecast to have plunged 43%.
“People are less concerned about earnings than they are about the guidance and what companies say about the next six months and 2021,” said Thomas Hayes, managing member at Great Hill Capital Llc in New York.
At 8:47 a.m. ET, Dow e-minis were up 411 points, or 1.61%, S&P 500 e-minis were up 38.5 points, or 1.24% and Nasdaq 100 e-minis were up 100.75 points, or 0.98%.
Tesla Inc jumped 8.6% and was set for a fourth straight session of gains after beating Wall Street estimates for second-quarter vehicle deliveries.
Travel-related stocks were also among the biggest gainers in premarket trade, with cruise line operators Carnival Corp, Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd rising more than 4%.
Economically-sensitive stocks including Morgan Stanley, Goldman Sachs, Citigroup Inc, JPMorgan Chase and Bank of America Corp gained between 1% and 3%.
Coty Inc added 4.2% after it named former top executive of L’Oreal, Sue Nabi, as its chief executive officer.
(Reporting by Pawel Goraj in Gdansk, additional reporting by Herbert Lash in New York; Editing by Sriraj Kalluvila and Arun Koyyur)