Another big rally upping the Dow 455 points, based not on good news but on the fact that the expected terrible news was not quite as terrible as feared.  That said, the unemployment numbers which were feared to be as high as 22 million actually came in at 20.5, not a huge variance but enough to infuse optimism into a very discouraged market.  As today’s expert points out, “Relative to expectations, you can see some silver linings in there.”  Still, removing the rose-colored glasses, it is the steepest decline since the Great Depression with the placation that, except for the initial panic in March, the markets are largely ignoring the hideous economic data and looking instead at COVID-19 data and any signs of the pandemic coming under control.  In other words, the dismal economy is widely seen as being temporary and this was further reflected in the lowest VIX number since the end of February, the first close below 30.  Volume continues to reflect a calming mood, today closing at 10.1 billion shares traded. 

fri  MAY 8, 2020 / 5:48 pm 

Wall Street jumps as historic job losses fewer than feared

Lewis Krauskopf

DJ:  23,875.89  +211.25      NAS:  8,979.66  +125.27      S&P:  2,881.19  +32.77     5/7

DJ:  24,331.32  +455.43      NAS:  9,121.32  +141.66      S&P:  2,929.80  +48.61     5/8

(Reuters) - Major U.S. stock indexes jumped on Friday and logged solid gains for the week after data on historic job losses due to the coronavirus crisis showed they were slightly fewer than feared.  All 11 S&P 500 sectors were positive, led by the beaten-up energy group .SPNY, which gained 4.3%.  A 2.4% gain in Apple (AAPL.O) shares also lifted the indexes after the iPhone maker said it will reopen a handful of U.S. stores starting next week.

The U.S. economy lost 20.5 million jobs in April, the Labor Department reported. Economists polled by Reuters had forecast payrolls diving by 22 million, but the decline still marked the steepest plunge since the Great Depression.  “It’s tough to call the jobs report, which is what everybody was waiting for, anything but a complete calamity, but relative to expectations you can see some silver linings in there,” said Brian Nick, chief investment strategist at Nuveen, pointing to the large number of temporary layoffs.  “Except for the initial panic in the month of March, in general the markets are ignoring economic data for the most part and are looking more at data related to COVID-19,” Nick said.

The Dow Jones Industrial Average .DJI rose 455.43 points, or 1.91%, to 24,331.32, the S&P 500 .SPX gained 48.61 points, or 1.69%, to 2,929.8 and the Nasdaq Composite .IXIC added 141.66 points, or 1.58%, to 9,121.32.  The Nasdaq posted its fifth straight daily gain, its longest such streak since December 2019. 

The Cboe Volatility Index , known as Wall Street’s fear gauge, fell 3.46 points to 27.98, its first close below 30 since Feb. 26.

Financial markets on Thursday began pricing in a negative U.S. interest rate environment for the first time, as investors grappled with the economic consequences of the new coronavirus outbreak.  Stocks have staged a sharp rebound since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. The tech-heavy Nasdaq on Thursday erased its 2020 declines and turned positive for the year.

Investors are now watching efforts by a number of states to spark their economies by easing restrictions put in place to fight the outbreak.  “People are watching closely to just see how this reopening process works,” said Keith Lerner, chief market strategist at Truist/SunTrust Advisory Services.  “On the margin, you are starting to hear businesses say that things are starting to look better from a depressed level.”  Optimism for markets was also fed by news that U.S. and Chinese trade representatives discussed their Phase 1 trade deal, with China saying they agreed to improve the atmosphere for its implementation.

In company news, Uber Technologies (UBER.N) shares rose 6.0% after the company said ride service bookings slowly recovered in recent weeks.  Noble Energy (NBL.O) shares gained 13.5% after the company said on Friday it would curtail oil production and further cut its capital spending to cope with a plunge in oil prices.

Advancing issues outnumbered declining ones on the NYSE by a 4.95-to-1 ratio; on Nasdaq, a 3.47-to-1 ratio favored advancers.  The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 64 new highs and three new lows.

About 10.1 billion shares changed hands in U.S. exchanges, below the 11.4 billion daily average over the last 20 sessions.