Wall Street doubled down on its bet that the worst of the coronavirus-induced recession has passed, sending stocks up again Friday despite a crushing jobs report.
Wall Street doubled down on its bet that the worst of the economic damage has passed, sending stocks higher again on Friday despite another historic, crushing report on the job market.
Instead of looking backward at last month’s job losses, some investors focused instead on the prospect of growth resuming later this year. They bought stocks of retailers that laid out plans to reopen in coming weeks, energy companies that would benefit as people start driving again and banks that may skirt the worst-case avalanche of loan defaults.
More recently, even as horrific data confirmed the recession fears, investors have pushed stocks higher as countries and many U.S. states laid out plans to relax restrictions on businesses meant to slow the spread of the coronavirus outbreak.Many analysts are skeptical of the rally, though, saying the economy probably won’t recover nearly as vigorously and quickly as the stock market has.
Companies whose profits are usually most closely tied to the strength of the economy led the market higher. Energy producers in the S&P 500 jumped 4.3% for the biggest gain of the 11 sectors that make up the index. Industrial companies and financial stocks were also stronger than the rest of the market.The trio were the hardest-hit sectors earlier in the year on worries about the coming recession, which would cause demand for their products to vanish and saddle banks with bad loans.
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