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Money News

Wall Street rises on record job growth; surging virus cases cap gains

(Reuters) - Wall Street rose on Thursday after a record-setting increase in monthly U.S. jobs, but surging COVID-19 cases raised fears of more lockdowns and kept gains in check.

The 11 Wall St. door of the New York Stock Exchange (NYSE) is seen in New York City, New York, U.S., June 26, 2020. REUTERS/Brendan McDermid/Files

The Nasdaq opened at an all-time high after data showed the U.S. economy created 4.8 million jobs in June, the most since the government began keeping records in 1939, but later pared gains on reports of another spike in infections across the country.

Florida reported more than 10,000 new cases on Thursday, the biggest one-day increase in the state since the pandemic started, creating even more skepticism around a V-shaped economic recovery.

“A lot of people who are just looking at the economic data and ignoring the COVID data are setting themselves up for a problem,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.

“If you are respectful of the COVID risk, that doesn’t require a drastic market sell-off, but it requires you to pause from hitting the buy button like crazy.”

Optimism about a post-pandemic rebound in business activity, aggressive U.S. stimulus and hopes of a vaccine have fueled a Wall Street rally since April, with the benchmark S&P 500 now just about 7% below its February record high.

Investors are now looking ahead to the quarterly earnings season, which kicks off in mid July, for signs of the hit to Corporate America in the latter half of the year.

Earnings for S&P 500 companies are forecast to have plunged 43% in the second quarter, according to Refinitiv data, while third-quarter profits are expected to tumble 25%.

“The market wants to hear the recovery story, they don’t want to hear about how much damage has happened,” Zigmont said.

At 11:51 a.m. ET, the Dow Jones Industrial Average was up 242.46 points, or 0.94%, at 25,977.43, the S&P 500 was up 29.58 points, or 0.95%, at 3,145.44, and the Nasdaq Composite was up 108.35 points, or 1.07%, at 10,262.98.

Ten of the 11 major S&P sectors were trading higher and gains were led by industrials, basic materials and energy stocks.

Tesla jumped 7.4% after beating Wall Street estimates for second-quarter vehicle deliveries.

Coty added 3.5% after it named former top executive of L’Oreal, Sue Nabi, as its chief executive officer.

Advancing issues outnumbered decliners more than 3-to-1 on the NYSE and 2-to-1 on the Nasdaq.

The S&P index recorded 33 new 52-week highs and no new low, while the Nasdaq recorded 101 new highs and seven new lows.

(Corrects typo in paragraph 1)

Reporting by Uday Sampath Kumar and Devik Jain in Bengaluru and Pawel Goraj in Gdansk; Editing by Sagarika Jaisinghani and Arun Koyyur

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