US stocks keep roaring higher despite protests: June 3, 2020

By CNN Business

Updated 7:56 a.m. ET, June 4, 2020
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1:12 p.m. ET, June 3, 2020

Here's why the stock market and headlines don't make sense

From CNN Business' Anneken Tappe

Stocks are rallying today, with the S&P 500 up 1% and the Dow up some 380 points, even as tensions rise between the US and China, and despite protests across the United States dominate headlines.

There is a huge disconnect between the headlines we get every day both in the US and overseas and where the stock market is going," Alicia Levine, chief strategist at BNY Mellon, told Alison Kosik on the CNN Business' digital live show Markets Now.

It's important for investors to remember that the stock market is forward looking, and the future is looking brighter because the economic reopening is going better than expected in both Europe and the Unites States. So far, reinfection rates haven't skyrocketed even though restrictions have been pulled back.

Tech is still the sector boosting the S&P 500, as those stocks make up such a large portion of the index.

"We've never seen such a disconnect by sectors in the US stock market," Beauchamp said, and it's reasonable to be a bit skeptical of how long this will last. Investors should perhaps also look at growth stocks and not just the big tech companies.

"We really think you should be investing where the Fed is investing, because this is a liquidity-driven market," she added.

This means corporate credit looks attractive, Beauchamp said, and gold continues to be a great hedge for investors.

1:08 p.m. ET, June 3, 2020

Job postings are still down, but they're improving: Indeed chief economist

From CNN Business' Anneken Tappe

America's labor market is in disarray and the coronavirus lockdown has forced millions of Americans out of their jobs.

Career website Indeed is seeing job postings down by a third versus last year, said Jed Kolko, its chief economist, on the CNN Business' digital live show Markets Now. That said, this has improved from the lows of four weeks ago. At that low-point, job postings were down some 40%, he said.

"The hardest hit sector are still hospitality and tourism," he said. Job postings in those industries are down 60% from last year, Kolko said.

Some industries that support the 'stay at home economy', including logistics, are seeing increases in job postings, he added.

12:32 p.m. ET, June 3, 2020

Another 1.8 million jobless claims are expected tomorrow

From CNN Business' Anneken Tappe

Tomorrow we find out how many millions more Americans filed for unemployment benefits last week.

Another 1.8 million first-time jobless claims are expected in the Department of Labor data due at 8:30 am ET Thursday. It would be the eleventh-straight week that claims are in the millions. Prior to the coronavirus pandemic, the United States had never recorded a single week over a million claims.

First-time filings hit their peak in the final week of March at 6.9 million and have declined every week since.

Continuing jobless claims, which count people who have filed for benefits for at least two consecutive weeks, are expected to reach 20.1 million, about a million fewer than in the week before. Economists see this is as a good sign, because it shows that people are returning to work. Even so, the progress is painfully slow given just how many people are in need of aid.

As of last week's data, one in four Americans -- more than 40 million people -- had filed for unemployment aid.

Tomorrow's claims data comes ahead of the the May jobs report due Friday at 8:30 am ET. Economists predict that 8 million jobs were lost in May, following 20.5 million that vanished in April. This would push the unemployment rate to nearly 20%, a rate not recorded since the Great Depression, and the highest monthly level since the data collection began in 1948.

12:31 p.m. ET, June 3, 2020

Warner Music Group pops in harmonious debut

From CNN Business' Paul R. La Monica

The IPO market seems to be making a comeback along with the rest of Wall Street.

Shares of Warner Music Group (WMG), the record label whose musical roster includes such top artists as Cardi B, Bruno Mars, Twenty One Pilots and Ed Sheeran, rose more than 15% in early trading Wednesday. That comes after the company priced its initial public offering above its expected range.

Warner Music Group, which was once owned by former CNN parent company Time Warner before being sold in 2003, has been privately held for the past few years -- a time when the music business has been revolutionized thanks to streaming services from Apple (AAPL) and Spotfiy (SPOT).

Warner Music Group wasn't the only IPO to shine on Wednesday either. Pliant Therapeutics (PLRX) surged 55% in its market debut.

11:55 a.m. ET, June 3, 2020

The Nasdaq is nearing all-time highs

From CNN Business' Matt Egan

Mass unemployment. Riots in the streets. A devastating pandemic. And near-record stock prices, at least for the Nasdaq. That's the world we live in.

While Main Street is suffering from a series of crises, Wall Street is swiftly recovering, thanks in large part to easy money from the Federal Reserve.

The Nasdaq has rallied four days in a row, despite widespread civil unrest across America. It's now just 1.5% away from the all-time high of 9,817.2 set in February. The

The sharp rally in the Nasdaq — it's up 41% since March 23 — has been driven by a race to buy large tech stocks, collectively known as FAANG, that are thriving during the pandemic. That includes Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google owner Alphabet (GOOGL).

Yet the stark disconnect between the stock market and economic reality also threatens to worsen wealth inequality — one of the drivers of the civil unrest.

"The stock market taking off — and decoupling from the real economy — is exacerbating inequality," said Kristina Hooper, chief global market strategist at Invesco.

11:41 a.m. ET, June 3, 2020

Dow rallies more than 400 points

From CNN Business' Anneken Tappe

The stock market continues to soar around midday, with the Dow up more than 400 points and the S&P 500 sharply higher as well.

A much better than expected employment report from ADP spurred today's rally, as investors grow more optimistic that the worst might be over for America's battered labor market. The unemployment rate is expected to jump to nearly 20% in May.

The Dow traded up 450 points, or 1.7%, while the S&P soared 1.2%. The Nasdaq Composite was up 0.7%.

11:29 a.m. ET, June 3, 2020

America's services sector improves slightly in May

From CNN Business' Anneken Tappe

The US services sector is still in disarray. But it's recovered a bit from its deep April slump.

That's according to the Institute for Supply Management, which surveys purchasing managers to track changes in business activities from the previous month.

In May, the purchasing managers' index (PMI) stood at 45.4 last month, up from 41.8 in April -- an improvement, and one that was slightly better than economists had expected.

The services sector is extremely important to the US economy. It includes everything from hospitality and entertainment, to travel, finance, real estate and agriculture. The effects of coronavirus hit services the hardest at first, which has made the downturn particularly painful.

Still, the sector seems to have recovered from its trough, even though any PMI level below 50 indicates economic contraction. It was the second contraction in a row following a 122-month period of expansion.

The small rebound "suggests that the services sector is now faring slightly better than the manufacturing sector as lockdowns are lifted. But the overall message is that the wider economic recovery is likely to be slow-going," said Michael Pearce, senior US economist at Capital Economics.

That was reflected in responses in May from purchasing managers, who told ISM they remained concerned about the pandemic's effect on their businesses, although many are planning on the resumption of business, said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee.

11:05 a.m. ET, June 3, 2020

US to block Chinese airlines from flying to America

From CNN's Pete Muntean and Gregory Wallace

The US government says it will block Chinese airlines from flying into the United States in response to what the country says is a policy that has prevented American-based carriers from service between the two countries.  

The Transportation Department restrictions will take effect June 16, but could be enacted earlier if President Donald Trump decides to do so.  

It says the Chinese government is violating an agreement between the two countries for international travel by preventing United Airlines (UAL) and Delta Air Lines (DAL) from resuming the trans-oceanic flights. Those airlines had asked to resume service on June 1.  

United, Delta, and American (AAL) suspended service to China due to the coronavirus pandemic. The US government also instituted travel restrictions to reduce the spread of the coronavirus.  

Shares of all three airlines rose around 5% in early trading.

The Transportation Department order said "Chinese aviation authorities have failed to permit US air carriers to" operate the routes they previously flew.  

"The Department will continue to engage our Chinese counterparts so both US and Chinese carriers can fully exercise their bilateral rights," the department said in a statement. 

"In the meantime, we will allow Chinese carriers to operate the same number of scheduled passenger flights as the Chinese government allows ours."

9:55 a.m. ET, June 3, 2020

Another mall staple teeters on the brink of bankruptcy

From CNN Business' Jordan Valinsky

Mall brands were already struggling long before coronavirus, and the pandemic certainly hasn't helped.

New York & Company owner RTW Retailwinds (RTW) warned it might soon file for bankruptcy because of temporary closures caused by Covid-19.

In a regulatory filing Wednesday, the company said it anticipates the pandemic to have "material adverse impact on its financial position, results of operations, and cash flows during fiscal year 2020."

As a result, the company said, it has "substantial doubt" about its ability to survive and it's "probable" that a Chapter 11 bankruptcy protection filing is coming. RTW Retailwinds owns around 400 stores and has 5,000 employees.

The pandemic's effects have hit clothing retailers particularly hard. J.Crew, JCPenney and Neiman Marcus all have filed for bankruptcy within the past month.