US equities post weekly gains despite grim economic data

NEW YORK (XINHUA) – Wall Street finished the past week on an upbeat note and posted solid weekly gains even after economic data painting the picture continues to worsen.

For the week, the Dow advanced 2.6 per cent, the S&P 500 ended 3.5 per cent higher, while the Nasdaq climbed six per cent.

The markets ended sharply higher last Friday with the Dow up more than 450 points despite data showing record job losses in the world’s largest economy last month.

United States (US) total nonfarm payroll employment fell by 20.5 million in April, and the unemployment rate rose to 14.7 per cent, due to the impact from the COVID-19 pandemic, the US Bureau of Labor Statistics reported last Friday.

Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality, said the report. “Huge job losses and a post-Great Depression high in the unemployment rate nevertheless understate the full extent of the damage in the labor market in April,” Chief Economist at FHN Financial Chris Low said in a note. “The report was still so bad it was ignored by markets, which failed to move.”

A Wall St sign near the New York Stock Exchange (NYSE) in New York City. PHOTO: AFP

“The stock market does not respond to what’s happening or already happened in the economy,” CEO at Zacks Investment Management Mitch Zacks said in a note last Saturday.

“The stock market is forward-looking, a discounter of future economic conditions,” he said, adding he expects “bouts of downside volatility before this is over”.

Dire data blanketed the airwaves and newspapers as the COVID-19 pandemic continues to ravage the US economy.

Another 3.169 million Americans filed for unemployment benefits in the week ending May 2, the US Department of Labor reported Thursday. That brought the seven-week total to about 33.5 million.