NEW YORK (Reuters) – World stocks rose for a fourth straight day on Thursday after U.S. payrolls increased by a record 4.8 million in June, but the dollar and Treasury debt prices also edged up, suggesting lingering concern about surging COVID-19 cases in many U.S. states.
New cases shot up by nearly 50,000 in the United States on Wednesday, according to a Reuters tally, marking the biggest one-day spike since the start of the pandemic.
Several states, along with some other parts of the world, are reversing or pausing reopenings to tackle a recent surge in infections, leaving analysts worried about another sell-off in financial markets if the damage mounts.
June’s job survey, which saw the unemployment rate fall to near 11% and average wages drop 1.2%, was taken just as the spike in COVID-19 cases started to accelerate. Over 31 million Americans were still collecting unemployment checks weekly.
“The strong rebound would normally be an unambiguously positive sign that a recovery is under way, (but) it is being accompanied by a sharp rise in new infections, which was what caused the collapse in the first place,” said Mike Bell, global market strategist at JP Morgan Asset Management in London.
“It is therefore too soon to say for certain that this recovery in employment sounds the all-clear for investors.”
The Dow Jones Industrial Average rose 279.45 points, or 1.09%, to 26,014.42, the S&P 500 gained 34.8 points, or 1.12%, to 3,150.66 and the Nasdaq Composite added 117.09 points, or 1.15%, to 10,271.72.
The pan-European STOXX 600 index rose 1.97% and MSCI’s gauge of stocks across the globe gained 1.34%. Emerging market stocks rose 2.33%.
Japan’s Nikkei futures rose 0.72% and overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 2.41% higher.
Oil futures prices rose, supported by the U.S. employment numbers and Wednesday’s drawdown in crude inventories, but the spike in U.S. coronavirus infections fanned concerns that economic activity will weaken in coming weeks. [O/R]
U.S. crude rose 1.98% to $40.61 per barrel and Brent was at $43.11, up 2.57% on the day.
Treasury yields backtracked to trade lower shortly after rising following the strong jobs data.
Benchmark 10-year notes last rose 4/32 in price to yield 0.6693%, from 0.682% late on Wednesday.
The 30-year bond last rose 4/32 in price to yield 1.4292%, from 1.434%.
“The knee-jerk move in the wake of the jobs report made sense,” said Ben Jeffery, a strategist at BMO Capital Markets in New York. “But clearly people were reluctant to sort of push that sell-off just given the headline risk over the weekend and the fact that things on the virus front still seem to be worsening.”
U.S. financial markets will be closed on Friday in observation of Saturday’s 4th of July Independence Day holiday.
In currencies, the dollar softened after the payroll numbers but trickled up to positive territory midmorning in New York, and has remained slightly higher since.
The dollar index rose 0.143%, with the euro down 0.2% to $1.1228.
“Dollar performance will hinge on the U.S. response to COVID,” said Juan Perez, senior currency trader at Tempus Inc in Washington. “On that end, the U.S. is losing because the situation is far more difficult than in other parts of the world.”
The Japanese yen weakened 0.09% versus the greenback to 107.58 per dollar, while sterling was last trading at $1.246, down 0.08% on the day.
Reporting by Rodrigo Campos; Additional reporting by Marc Jones in London, Pawel Goraj and Devik Jain in Bengaluru, Gertrude Chavez-Dreyfuss in New York and Karen Pierog in Chicago; Editing by Bernadette Baum
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