Stock indexes shake off jobs report to close higher
Wall Street notched more milestones Friday as the market largely shrugged off another discouraging jobs report amid expectations that the incoming Biden administration will pump more aid into the pandemic-ravaged economy.
The S&P 500 rose 0.55%, its second straight record high, after bouncing back from a midday slump that knocked it down 0.5%. The Dow Jones Industrial Average and Nasdaq composite all closed at new highs.
The S&P 500 rose 20.89 points to 3,824.68. The Dow gained 56.84 points, or 0.18%, to 31,097.97. The Nasdaq climbed 134.50 points, or 1%, to 13,201.98.
Technology stocks and companies that rely on consumer spending helped lift the market, outweighing losses in financial, industrial and other sectors. The gains pushed the S&P 500 to its second weekly gain in a row. Treasury yields continued to move higher, fueled by expectations of increased federal borrowing, more stimulus for the economy and the possibility of higher inflation.
The Labor Department said Friday that employers cut jobs for the first time since April as the worsening pandemic led more businesses to shut down. But Wall Street remains hopeful that Washington will come through with more badly needed support for American workers and businesses after Presidentelect Joe Biden’s inauguration.
“There are still close to 4 million people who have been long-term unemployed, which could threaten growth in the next couple of months,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “The market continues to slowly grind higher because [investors] are expecting additional stimulus when the new administration goes into effect later this month.”
President Donald Trump acknowledged late Thursday that he’ll be leaving the White House later this month. With
Democrats soon in control of the presidency, Senate and House, investors are anticipating Washington will try to deliver even more stimulus for the struggling economy. That’s layering on top of expectations already built up for the economy to get healthier as coronavirus vaccines roll out in 2021.
The much weaker-thanexpected report on the jobs market underscored the stakes for the economy, and analysts said it adds more pressure on Congress to act. Employers cut 140,000 more jobs last month than they added, the Labor Department said.
It was the first month of job losses for the economy since April, and it was much a worse reading than the modest growth that economists were expecting to see. Such pressure is rising on economies around the world as the pandemic accelerates.
Treasury yields zigzagged after the release of the jobs report, but they remain on an upward trend. The yield on the 10-year Treasury rose to 1.12%. That’s up from 1.05% late Thursday and 0.90% early this week.
Stocks of smaller companies fell. The Russell 2000 index of small-cap stocks dropped 5.23 points, or 0.2%, to 2,091.66. It ended the week with a 5.9% gain, well ahead of the 1.8% gain for the big stocks in the S&P 500.
Financial stocks gave up some of their big gains from earlier in the week, which were triggered by expectations for a strengthening economy and bigger profits from making loans at higher interest rates. Bank of America fell 1%.
On the other end was Tesla, which climbed 7.8% for the biggest gain in the S&P 500. The automaker surged more than 740% last year, and it’s climbing more amid hopes that a Democratic-run D.C. could encourage the use of more electric vehicles. The jump pushes Tesla’s total market value past Facebook’s, and it’s now the fifth-largest stock in the S&P 500.