The estimates for the direness of the job market in May turned out to be overly pessimistic. On Friday, the U.S. Labor Department reported an increase in nonfarm payrolls of 2.5 million for the month of May, nowhere close to the decline of 8 million jobs that economists were expecting. May's unexpected improvement came after more than 20 million jobs were shed in April due to the novel coronavirus pandemic.

The unemployment rate was also far better than expected, coming in at 13.3% in May. That's down from 14.7% in April, and well below forecasts calling for an unemployment rate of nearly 20%. The surprise gain in jobs sent the Dow Jones Industrial Average (^DJI -0.93%) flying on Friday. By 11 a.m. EDT, the Dow was up about 3.1%.

Almost every stock in the Dow was up, some substantially so, due to no other reason than the strong jobs report. Boeing (BA -0.31%) fit into that category, posting a double-digit gain on no company-specific news. Meanwhile, Apple (AAPL 0.06%) stock got a small boost from some optimistic analyst commentary.

People celebrating.

Image source: Getty Images.

Boeing optimism grows

Shares of airplane manufacturer Boeing have been on fire lately, even as the stock remains down substantially from its pre-pandemic high. Boeing stock shot up Wednesday on rumors of an activist investor stake, and it rose again on Thursday after American Airlines announced an increase in domestic flights for the summer.

Friday's strong jobs report was enough to extend the rally. Shares of Boeing were up about 12.8% in the morning, no doubt due to the state of the U.S. economy exceeding expectations. Including Friday's gain, Boeing stock is now up about 125% from its March low.

While investors are piling back into Boeing stock, there are a few things worth remembering. First, the 737 Max is still grounded, and the timeline for the plane's return to the skies remains unclear. Second, while demand for air travel is slowly rebounding, a full recovery could still take years. And third, Boeing is going to exit this crisis with a lot of debt -- the company sold $25 billion of new debt in April.

Boeing's financial results are going to look ugly for a while as the airline industry tries to stage a comeback. A major U.S. airline filing for bankruptcy is still a very real possibility. While the Boeing stock rally is no doubt a relief for shareholders, it's anyone's guess whether it holds up in the coming months.

Apple gets a price target bump

Analysts at Wedbush really like the potential of Apple's services business. The investment firm boosted its price target on Apple stock from $350 to $375 on Friday, citing the easing of some headwinds. Wedbush also noted that its bull case could see the stock soar to $425 by the end of 2021.

Growth in services and the potential of 5G-enabled iPhones are behind Wedbush's optimism. Apple is still expected to launch 5G iPhones later this year, although delays are possible because of supply chain disruptions.

Wedbush isn't alone in praising Apple's growing services segment. On Wednesday, Morgan Stanley raised its price target on Apple stock due to persistently strong revenue from the App Store. Morgan Stanley expects Apple's services revenue to grow by 16.9% this year, and to accelerate to 17.8% growth in fiscal 2021.

Questions remain about how strong demand will be for new iPhones later this year. While the U.S. economy wasn't as bad as feared in May, unemployment is still elevated, and a second wave of the novel coronavirus is still a possibility.

Apple stock rose about 1.7% Friday morning, carving out a new 52-week high.