Dow futures rally more than 700 points after shockingly strong U.S. jobs report – CNBC

U.S. stock futures were sharply higher Friday, continuing big gains on the week, after the latest monthly U.S. jobs report came in much better than expected. 

Dow Jones Industrial Average futures added 743 points, or 2.8%. S&P 500 futures gained 2%. Futures for the Nasdaq-100, which hit a record on Thursday, added 0.6%.

Those gains came after the Labor Department reported the U.S. unemployment rate came in at 13.3% for the month of May. That was much better than the 19.5% estimate. Overall employment rose by 2.5 million last month. Economists polled by Dow Jones had forecast a decline of more than 8 million jobs.

Shares of airlines jumped in premarket trading, adding to their big gains this week, as the industry added more summer flights. Casino stocks gained as Las Vegas began to open this week.

The Dow is up 3.5% this week. The S&P 500 is up 2.2% and the Nasdaq Composite is up 1.3% through Thursday’s close.

“The economy and the stock market have generally moved in the same direction over time, though rarely in lock-step,” said Willie Delwiche, investment strategist at Baird, in a note. “The gulf between current headlines for Wall Street (best 50-day rally ever for the S&P 500) and Main Street (one-in-four American workers have now filed for jobless benefits) seems more extraordinary than normal.”

American Airlines jumped 28.4% in premarket trading Friday. United Airlines shares surged 20.2%. The US Global Jets ETF is up 27% this week. Cruise-line operators such as Norwegian Cruise Line and Carnival both advanced more than 13% while Royal Caribbean gained 9.8%.

MGM Resorts jumped 5.4% in the premarket while Kohl’s and Nordstrom advanced more than 10% each. Mall operator Simon Property gained 7.3%. Stay-at-home winners such as Netflix and Amazon dipped. 

“While not looking past the current pain, the hope is that from these moments of uncertainty, a path toward a more hopeful future (and more robust economic participation) will emerge,” said Delwiche.

Shares of banks, which have been decimated during the pandmeic as lending activity and margins dried up, soared as the jobs report suggested a quick bounce back for the economy.  JPMorgan Chase, Citigroup, Wells Fargo and Bank of America all rose at least 7%.

On Thursday, the S&P 500 and Nasdaq Composite each snapped a four-day winning streak, while the Dow eked out a minuscule gain. The Nasdaq-100 index briefly touched a record high before rolling over to close more than 0.7% lower.

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