Stocks Still Fall Sometimes

By Alex Eule |  Thursday, June 4

A Reminder. It turns out stocks can still fall. The S&P 500 finished the day down 0.3%. It was only the fourth time in the last 15 sessions that the large-cap index has lost ground. After a long stretch when nothing seemed to worry investors, a new round of jobs data inserted the slightest hiccup into the re-opening narrative. 

The Dow Jones Industrial Average still managed to eke out a gain, up 12 points on the day.

After falling unexpectedly a week ago, the number of continuing jobless claims came in at 21.5 million, an increase of 650,000 from last week.  

The number of new claims, though, fell for a ninth consecutive week, to 1.88 million for the week ending May 30. Of course, there are still roughly 43 million Americans who have lost their jobs, a group larger than the population of California, Barron's Lisa Beilfuss notes today. The latest numbers are a reminder that the re-opening doesn't just involve flipping a switch. Here's what Chris Rupkey, chief financial economist at MUFG, told Lisa: 

The good news is the country may have turned the corner in the coronavirus pandemic, but the bad news is economic growth is going to just limp along if it has to carry millions and millions of jobless workers...The pandemic recession is the shortest in history and may soon be technically over, but the economy won’t be safe on the higher ground of full recovery until everyone gets their jobs back.

Investors haven't given up hope on the re-opening front, though -- far from it. In fact, today's top gainers were all airlines, suggesting a new stage of optimism about the economy.  And the moves were substantial: American Airlines soared 41%,  United Airlines jumped 16%, and Delta Air Lines was up nearly 14%. The next two top gainers were Nordstrom (+10%) and Norwegian Cruise Line (+9%).

Meanwhile, the leading stay-at-home stock, Zoom Video Communications, pared some of its recent gains, falling 6%. Investors want to leave their homes, and they're adjusting their portfolios accordingly. 

The risk-on trade is also driving enthusiasm for initial public offerings. In what was the first significant tech listing since December, shares of ZoomInfo opened 90% higher after shares of the cloud-based subscription database platform priced at $21. The stock ultimately closed up 62%, to $34. Here's more on ZoomInfo's IPO.