Stocks are rushing higher in early trading Friday after a stunningly good report on the U.S. job market gave Wall Street's recent rally another shot of adrenaline.
The S&P 500 was up 2.2% within the first 15 minutes of trading after the government said that U.S. employers added 2.5 million workers to their payrolls last month. Economists were expecting them instead to slash another 8 million jobs amid the ongoing fallout from the response to the coronavirus pandemic.
While economists cautioned that it's just one month of data and could be giving false hope, the report gives credence to the building optimism among stock investors that the economy can recover relatively quickly from its current hole. That hope has been a big reason for the better than 40% rally for the S&P 500 since late March.
The S&P 500 is now down only about 6.3% from its record set in February after earlier being down nearly 34%.
"It looks like the healing process is underway in the jobs market and it looks like it's happening sooner than expected," said Todd Lowenstein, equity strategy executive of The Private Bank at Union Bank. "It looks like the worst is behind us."
The Dow Jones Industrial Average was up 756 points, or 2.9%, at 27,037, as of 9:45 a.m. Eastern time, and the Nasdaq was up 1.6%.
In another show of increased confidence, the yield on the 10-year Treasury zoomed up to 0.90% from 0.82% late Thursday. This area of the market was much earlier than stocks to give warning about the coming economic devastation from the coronavirus outbreak. It had also been much slower to rise than stocks recently, but the 10-year yield is now close to its highest level since late March.
Stocks began their tremendous rally in late March after the Federal Reserve came to the rescue once again with promises of immense aid to keep markets running smoothly. Capitol Hill also agreed on unprecedented amounts of aid for the economy, which helped eliminate the worst-case scenario for many investors of a full-blown financial crisis.
More recently, it's been hopes that growth can resume for the economy as states across the country and nations around the world relax lockdown restrictions meant to slow the spread of the virus. Even as horrific and historic data continued to come in on the job market and economy, stocks largely remained resilient in their climb.
If their optimism proves to be right, it wouldn't be the first time. During past recessions, stocks have historically hit their bottom and turned upward months before the economy has. That's because investors are setting stock prices now for where they see corporate profits heading months into the future.
Continuing a recent trend, investors on Friday continued to move out of stocks that had been earlier winners in the weak, stay-at-home economy and into companies that would benefit most from a growing economy.
Smaller stocks had the market's biggest gains, as they typically do when expectations for the economy are rising. The Russell 2000 of small-cap stocks jumped 4%.
Among the biggest stocks, energy producers, banks and industrial companies were jumping to the biggest gains. Their profits tend to be very closely tied to the strength of the economy.
Travel-related companies were also strong, after their stocks got pummeled early in the outbreak on worries that no one would want to fly or go onto a cruise ship for a long time.
American Airlines Group jumped 29%, tacking even more gains onto its 41.1% surge a day before when it said it would fly more of its regular U.S. schedule in a bet that fliers will return to the skies.
Norwegian Cruise Line rose 20.8%, and United Airlines jumped 21.6%.
Retailers and owners of shopping malls surged on hopes that people may also head back to enclosed stores. Kohl's added 15.3%, and Simon Property Group rose 13.5%.
The stocks that had been the steadiest earlier this year when investors were searching for stay-at-home winners, meanwhile, were lagging the market.
Netflix, whose subscriber rolls swelled with people hunkering down at home, slipped 0.2%. Clorox, whose disinfecting wipes had been cleared off shelves, was down 2.5%, and Amazon slipped 0.3%.