S&P 500, Dow rally to record highs as investors bet on last-minute stimulus breakthrough

© Associated Press Associated Press

  • US equities jumped on Friday after disappointing labor-market data boosted hopes for an end-of-year stimulus compromise.
  • The S&P 500, Dow Jones industrial average, and Nasdaq composite all closed at record highs.
  • The US added 245,000 nonfarm payrolls in November, handily missing the consensus economist estimate of 460,000 additions. The unemployment rate fell to 6.7% from 6.9% and met forecasts.
  • Though the data suggests the nation’s economic recovery is slowing, politicians and economists pointed to the report as a signal to expedite stimulus talks.
  • Oil swung higher after OPEC+ decided to lift production by 500,000 barrels per day starting in January. West Texas Intermediate crude gained as much as 2.3%, to $46.68 per barrel.
  • Watch major indexes update live here.

US stocks gained on Friday after worse-than-expected November jobs data lifted hopes for a near-term stimulus deal.

The benchmark S&P 500, Dow Jones industrial average, and Nasdaq composite all set fresh intraday records and closed at all-time highs.

The country added 245,000 nonfarm payrolls last month, the Bureau of Labor Statistics said Friday. Economists surveyed by Bloomberg expected a much higher reading of 460,000 additions. The total also marked a drop from the revised 610,000 jobs added in October.

The US unemployment rate dipped to 6.7 from 6.9%, meeting economist forecasts. The rate has fallen steadily from the 14.7% peak seen in the spring, but the pace of recovery has slowed significantly in recent months.

Here’s where US indexes stood at the 4 p.m. ET market close on Friday:

Read more: Morgan Stanley handpicks 42 stocks to buy as their company-specific strengths help them deliver strong growth for many years to come

Load Error

Though the data surprised to the downside, it spurred new optimism for a stimulus compromise to be reached before the end of the year. Democrat and Republican lawmakers have warmed to a $908 billion proposal throughout the week, marking the first major step forward in stimulus efforts after months of gridlock. The package includes funding for small businesses, state and local governments, and expanded federal unemployment benefits.

“Today’s report is beckoning lawmakers to act on additional fiscal stimulus measures in order to bridge the output gap in the economy until a vaccine is deployed,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said, adding that “the longer they hold out the wider the gap may become.”

Various politicians came out in support of a rapid stimulus response. Senate Minority Leader Chuch Schumer said the data “shows the need for strong, urgent emergency relief is more important than ever.”

Read more: Here are the 17 stocks best-positioned to benefit from a booming supersonic jet industry that will be worth $340 billion by 2040, UBS says

President-elect Joe Biden said the report shows “the economy is stalling” ahead of what’s set to be a dire winter.

“This situation requires urgent action,” Biden said in a statement. “Congress and President Trump must get a deal done for the American people.”

Energy and materials stocks led the S&P 500 to its new record. Consumer discretionary and utilities stocks lagged the broader market.

Gains come after a mixed Thursday session that placed the Nasdaq composite at record highs. Stocks wavered into the close after The Wall Street Journal reported Pfizer cut its vaccine distribution target due to supply-chain issues. The news pulled the S&P 500 into a loss, while the Dow and Nasdaq composite posted mild gains.

Read more: HSBC says buy these 31 global stocks that are exposed to the pandemic’s biggest tech disruptions and set to become growth engines of the future

The disappointing jobs report comes as COVID-19 cases continue to climb. The US reported 210,161 new cases on Wednesday, bringing the 7-day average to 173,227, according to The COVID Tracking Project. Hospitalizations neared 101,000 and deaths exceeded 267,000.

Bitcoin dipped below $19,000 on Friday after climbing as high as $19,556.86. The cryptocurrency has retraced most of its Tuesday losses but remains far from retaking the $19,920 record notched at the start of the week.

Spot gold fell as much as 0.6%, to $1,829.28 per ounce, before paring losses. The US dollar weakened against an index of Group-of-20 currencies and the 10-year Treasury yield hit its highest level since March.

Oil rallied after OPEC+ ruled to cautiously lift production by 500,000 barrels per day starting in January. West Texas Intermediate crude gained as much as 2.3%, to $46.68 per barrel. Brent crude, oil’s international benchmark, rose 2.4%, to $49.86 per barrel, at intraday highs.

Now read more markets coverage from Markets Insider and Business Insider:

Small stocks are skyrocketing and 2021 is set to be their best year in almost 2 decades, Jefferies says. Here’s how to position for the huge performance.

US mortgage rates fall to 14th record low of 2020 as housing-market frenzy charges on

The stimulus-plan compromise backed by top Democrats scraps a fresh wave of $1,200 direct payments that economists want

Continue Reading