Dow Eases From Highs on Rising Infections, but Jobs Surge Lifts Hopes

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Investing.com – Wall Street retreated from highs on Thursday as concerns about rising coronavirus cases reined in some investor optimism following a stronger-than-expected jobs report.

The Dow Jones Industrial Average gained 0.96%, or 247 points, but had gained over 400 points intraday. The S&P 500 rose 0.97% and the Nasdaq Composite added 1.04%,

Florida reported a one-day spike of more than 10,000 coronavirus cases, underscoring further signs that states are struggling to control the spread of the virus that threatens to stall the reopening progress.

The spike in new infections prompted investors to reassess their bullish bets on stocks tied to reopening progress.

Airlines and cruise stocks retreated from session highs; American Airlines (NASDAQ:AAL) turned negative after hitting a session high of $13.42 and Carnival (NYSE:CCL) was also down after rising intraday.

The ongoing rise in new cases cooled some hopes that signs of a quicker-than-expected recovery in jobs point to a V-shape recovery.

The U.S. economy created 4.8 million jobs in June, topping forecasts for 2.9 million jobs, while the unemployment rate fell to 11.1% from 13.3% in May. Economists expected it to drop to 12.4%.

About 33% of lost jobs, or 7.5 million out of 22.2 million, have been clawed back following losses earlier in the month, but some questioned whether the strength can continue as infections continue to mount.

“The June employment report was unambiguously positive, with jobs coming back much faster than anticipated, ” Jefferies (NYSE:JEF) said. “While the quick turnaround is very encouraging, sustainability remains in question given the covid resurgence and the rollback of reopening in some states.”

Energy was among the biggest gainers, underpinned by rising oil prices as investor worries about demand abated.

Noble Energy (NASDAQ:NBL) Marathon Oil (NYSE:MRO) and Diamondback Energy (NASDAQ:FANG) led the sector higher.

Growth in emerging economies, low energy prices and rising petrochemical sales will support oil demand, Goldman Sachs (NYSE:GS) said. The bank forecasts oil demand to decline by 8% this year, rebound by 6% in 2021 and reach pre-Covid levels in 2022.

In other news, Tesla (NASDAQ:TSLA) surged 8% to an all-time high as its second-quarter vehicle deliveries, topped analysts estimates at a time when others in the auto industry have seen sales slump.

Tesla delivered 90,650 vehicles during the quarter, well above estimates for 74,130 vehicles.

Elsewhere, insurance tech company Lemonade rallied on its public market debut, soaring 105%. The stock was priced at $29 per share.

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