Stocks rallied to finish the week, vaulting despite an April jobs report that felt ripped straight from the Great Depression.
- The S&P 500 advanced 1.69%.
- The Dow Jones Industrial Average rose 1.91%
- The Nasdaq Composite tacked on 1.58%
- Broadly speaking, cyclical names were in style as Dow Chemical (NYSE:DOW) was the leader of the blue-chip index Friday, shooting higher by about 4%.
Unfortunately, the Depression comparison I used above isn’t hyperbole. Data from the Labor Department indicate employers slashed a staggering 20.5 million jobs last month, bringing the U.S. jobless rate to 14.79%. While that’s better than expected, it’s still the highest unemployment rate since the Great Depression.
The April jobs report underscores two points, neither of which is good. First, essentially all of the jobs gains of the past decade are gone. Second, it could take years for those jobs to return.
To put things delicately, those are concerning numbers, but somehow, someway, 29 of 30 Dow stocks were higher in late trading, with McDonald’s (NYSE:MCD) being the lone offender.
Try Figuring This Out
It’s not exactly a quadratic equation, but it’s nonetheless vexing. Follow along for a minute. On a day when employment data was terrible, energy numbers confirmed a sector pullback on drilling activity and more news stories were published about some companies extending work from home through the end of year, oil closed higher.
In fact, that’s the second straight week in which crude posted a weekly gain. That was enough to place Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) among the top Dow stocks today, with Exxon actually ranking number two behind Dow Chemical.
I’ve been talking about Disney (NYSE:DIS) quite a bit this week, but today it’s good news. Disney stock advanced on a pair of theme park-related catalysts. Investors can decide which is more important, but it’s undoubtedly good news that Disney Springs, an entertainment venue adjacent to Disney World in Orlando, is looking toward a May 20 phased reopening.
In China, Shanghai Disneyland is reopening on May 11, with tickets selling out in a matter of minutes. Just speculating, but the Shanghai reopening could serve as a template for getting Disneyland and Disney World open again, and which would likely provide a near-term boost for Disney stock.
On a day unusually conducive for embracing riskier names, Procter and Gamble (NYSE:PG) — typically the opposite of risky — was among the Dow’s leaders. P&G’s Friday move may be attributable to news that rivals Clorox (NYSE:CLX) and Lysol maker Reckitt Benckiser will have difficulty catching up with unexpected demand for disinfecting wipes this year.
More Reopening News
Apple (NASDAQ:AAPL) extended its recent bullishness, closing higher on news that the company will commence reopening retail stores in some states next week.
That’s meaningful because all Apple stores outside of China have been shuttered since mid-March. The iPhone maker has 271 U.S. stores; some in Alabama, Idaho and South Carolina are slated to reopen next week.
Bottom Line on the Dow Jones Today
With the April jobs report in the rearview mirror, investors can get back to fretting about earnings and as John Butters of FactSet outlines, there are reasons to do just that.
“In terms of earnings, the percentage of companies reporting actual EPS above estimates (66%) is below the five-year average,” said Butters in a note out today. “In aggregate, companies are reporting earnings that are 2.3% above the estimates, which is also below the five-year average.”
Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.