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More Record Highs in Stocks 12/04 15:59
Wall Street closed out a solid week for stocks Friday with more record highs
as traders took a discouraging jobs report as a sign that Congress will finally
move to deliver more aid for the pandemic-stricken economy.
(AP) -- Wall Street closed out a solid week for stocks Friday with more
record highs as traders took a discouraging jobs report as a sign that Congress
will finally move to deliver more aid for the pandemic-stricken economy.
The S&P 500 rose 0.9%, notching its third all-time high this week. The Dow
Jones Industrial Average, Nasdaq composite and Russell 2000 index of smaller
companies also closed at record highs.
The gains were broad, with about 81% of the companies in the S&P 500 moving
higher. Gains in technology, health care and energy stocks helped lift the
market, outweighing losses in utilities and companies that rely on consumer
spending. Treasury yields rose, a sign of growing confidence in the economic
outlook.
Hopes remain deeply rooted on Wall Street that one or more coronavirus
vaccines are coming to rescue the global economy next year. But efforts to
contain a surge in new virus cases has stoked worries about more economic pain
for companies and consumers.
That's why Friday's much weaker-than-expected jobs report perversely helped
lift stocks. Investors are betting the report may be bad enough to help kick
Congress out of its paralysis and deliver more support for the economy.
"In a twist of irony, the bad jobs number is positive for markets today,"
said Keith Buchanan, portfolio manager at Globalt Investments. "The market is
telling us today that if the labor market continues to show slowing momentum,
it's much more likely the powers that be in D.C. agree to something that's
material."
The S&P 500 rose 32.40 points to 3,699.12. The benchmark index climbed 1.7%
for the week, it's second consecutive weekly gain. The Dow picked up 248.74
points, or 0.8%, to 30,218.26. The Nasdaq picked up 87.05 points, or 0.7%, to
12,464.23.
Stocks of smaller companies, which have recently helped lead the market
after lagging earlier this year, outgained the broader market Friday. The
Russell 2000 climbed 43.75 points, or 2.4%, to 1,892.45, more than double the
gain for the big stocks in the S&P 500.
Stocks seemed headed for a downbeat day early Friday as traders weighed the
disappointing jobs report. Treasury yields sank, and U.S. stock futures wobbled
after the data showed employers added just 245,000 jobs last month, half of
what economists were expecting. The report marked a sharp step down from
October's gain of 610,000 and was the fifth straight month of slowing growth.
Economists called the numbers disappointing and evidence that the worsening
pandemic will likely destroy more jobs and income for the economy in the coming
months, which are shaping up to be a bleak winter.
But markets quickly firmed amid hopes that the dour data could spur some
action from Congress, which has dithered for months after much of its last
round of financial support for the economy expired during the summer.
"Overall, 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, and the longer they hold out the wider the gap may
become," said Charlie Ripley, senior investment strategist for Allianz
Investment Management.
Democrats and Republicans have been making on-and-off progress on talks for
another round of support for the economy, including aid for laid-off workers
and industries hit hard by the pandemic. Momentum has seemed to swing back to
"on" this week after Democrats signaled willingness to accept a smaller package
than they were earlier demanding.
House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell spoke
on the phone about a possible deal on Thursday, and lawmakers from both parties
have been voicing support for a bipartisan deal. The glimmers of progress
follow months of cajoling and pleading by economists and investors, who say
such aid is essential. Many obstacles remain, though.
The hope in markets is that financial support from Washington could help
carry the economy through a dark winter. Surging coronavirus counts,
hospitalizations and deaths are pushing governments around the world to bring
back varying degrees of restrictions on businesses. They're also scaring
consumers away from stores, restaurants and other normal economic activity.
Hopefully, the economy will be able to stand more on its own next year after
one or more COVID-19 vaccines help start a slow return to more normal
conditions. Such hopes helped stocks muscle 10.8% higher in November, though
the momentum has slowed a bit recently as the pandemic accelerates at a
troubling rate.
Energy companies were some of Friday's best performers, as oil prices climb
further out of the hole they plunged into during the spring following a
collapse in demand. Diamondback Energy jumped 12.7%, and Occidental Petroleum
gained 13.4% for the two biggest gains in the S&P 500. Both stocks remain down
by about 50% for the year, though.
The yield on the 10-year Treasury shook off an initial stumble following the
release of the jobs report to rise to 0.97%, up from 0.91% late Thursday.
European markets rose. Asian markets mostly rose, except in Japan, where the
Nikkei slipped.
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