Dow ends up 2.1%, extending rally on recovery hopes

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City. (photo: Stan Honda, AFP/Getty Images)

The Dow Jones Industrial Average finished up 527.24 points (2.05 per cent) at 26,269.89.

The broad-based S&P 500 gained 42.05 points (1.36 per cent) to 3,122.87, while the tech-rich Nasdaq Composite Index advanced 74.54 points (0.78 per cent) to 9,682.91, moving to within striking distance of its all-time high.

Payrolls firm ADP showed the US shed another 2.8 million jobs in May, following nearly 20 million job losses in April.

Yet the losses were below the nine million expected by economists, who have been predicting a rebound in employment thanks to states' moves to reopen and a massive government rescue package that has allowed some companies to retain or rehire workers.

A survey of the services industry by the Institute of Supply Management also showed contraction again in May, although the extent of the slowdown was less than the prior month.

While most economic data remains "dismal," the reports "are becoming less bad at the margins," said Quincy Krosby, chief market strategist at Prudential Financial.

"Absent a second wave (of the coronavirus), the US economy is gaining strength, albeit slowly," Krosby added.

Besides the weak data, investors also looked past a US order to suspend all flights by Chinese airlines into and out of the United States in the latest example of growing friction between the world's two largest economies.

The session has been especially buoyant for companies expected to benefit from the recovery.

These include industrial companies like Boeing, up 13 per cent, oil giant Exxon Mobil, up 4.1 per cent, and banks, including JPMorgan Chase, which surged 5.4 per cent.

Among other companies, Warner Music made a successful debut on the Nasdaq, rising 20.5 per cent after an initial public offering raised US$1.9 billion.

Zoom Video won 7.6 per cent after it reported that quarterly revenue more than doubled to US$328.2 million as usage jumped due to coronavirus shutdowns.