Market Snapshot: Dow trades in record territory Friday even as November jobs report comes in cooler than expected

Market Snapshot: Dow trades in record territory Friday even as November jobs report comes in cooler than expected

U.S. stock indexes traded in record territory Friday morning after a report on employment showed fewer jobs were created in November than had been estimated by economists, perhaps bolstering the case for further fiscal stimulus from Congress.

What are major benchmarks doing?

The Dow Jones Industrial Average DJIA, +0.34% rose 124 points or 0.4%, to 30,096, while S&P 500 SPX, +0.45% gained 17 points, or 0.5%, to about 3,683. The Nasdaq Composite Index COMP, +0.35% edged 23 points, or 0.2%, to 12,400.

All three major benchmarks were trading at or near record highs.

Stocks ended mixed in a choppy session Thursday, with the S&P 500 falling 2.29 points, or 0.1%, to end at 3,666.72, while the Dow rose 85.73 points, or 0.3%, to end at 29,969.52. The Nasdaq Composite posted a record close, rising 27.82 points, or 0.2%, to 12,377.18.

What’s driving the market?

The U.S. Labor Department report showed that 245,000 jobs were created in November, marking the smallest gain in the pandemic period, as the unemployment rate held steady at 6.7%.

Investors were looking at the strength of the labor market as the COVID-19 pandemic worsens for clues at to whether lawmakers in Washington might finally pass another round of financial aid to bolster the economic recovery.

“Friday’s report confirms that the recent labor market recovery is decelerating.,” wrote James McDonald, CEO and chief investment officer of Hercules Investments, in emailed comments.

“With escalating COVID-19 cases and enforced shutdowns here to stay through the winter, business executives see the writing on the wall and have fallen back on layoffs to cut costs,” he wrote.

Read: Job growth has seriously slowed’ — economists react to ‘disappointing’ November employment report

Some analysts argued that a weaker-than-expected reading could be a positive for equities because it would inject more urgency into talks between lawmakers over another round of pandemic aid.

“Noticeably though, the market’s response to today’s weak jobs number is muted. It seems like investors are focusing on the prospect of additional fiscal stimulus and today’s weak number potentially pushes the negotiations over the finish line,” wrote Seema Shah, chief strategist, Principal Global Investors, in emailed comments on Friday.

Senate Majority Leader Mitch McConnell, R-Ky., said Thursday that reaching a compromise on another coronavirus fiscal stimulus package was possible, as long as Democrats moved toward Republican positions.

The remarks came after congressional Democratic leaders said Wednesday they were endorsing a bipartisan proposal estimated to cost about $908 billion, well above what McConnell has supported but well below the more than $2 trillion effort Democrats had pushed in talks ahead of the election.

“Since capital markets have been trading on nothing more than government intervention on both [the] monetary and fiscal side ever since the March panic lows, any prospect of additional immediate stimulus would be viewed as bullish by the market and indices would likely sprint to fresh record highs into the close of the week ,” said Boris Schlossberg, managing director of BK Asset Management, in a note.

Stocks saw historic gains in November and continued to push higher this week in a rally tied largely to optimism over progress toward COVID-19 vaccines, with investors looking past a sharp rise in new cases and deaths over the same period.

Stock indexes gave up gains in late trade Wednesday though after The Wall Street Journal reported that Pfizer Inc. PFE, -0.11% expected to ship half the predicted numbers of vaccine doses this year.

Analysts said the reaction may have been overdone. A Pfizer spokesperson told Barron’s that the company’s guidance since the second week of November had been for global deliveries of 50 million doses in 2020 and 1.3 billion in 2021.

Pfizer and its partner, BioNTech SE BNTX, -2.03% have applied for emergency use approval for its vaccine from U.S. regulators, who are expected to decide within weeks. The U.K. earlier this week authorized a vaccine for emergency use, with initial distribution set to begin next week.

Investors will also hear from a number of Fed officials over the course of the day, including New York Federal Reserve Bank President John Williams, Chicago Fed President Charles Evans, Fed Gov. Miki Bowman and Atlanta Fed President Raphael Bostic.

Which companies are in focus?

  • Pfizer Inc. shares were up 0.2%.

  • Shares of drugmaker Moderna Inc. MRNA, -2.20% were down 3.4% after it said late Thursday that its COVID-19 vaccine candidate has potential to confer longer-term immunity, and that it expects to have 20 million doses of the trial vaccine at hand in the U.S. this year.

  • DocuSign Inc. DOCU, +7.78% shares surged over 10% after the maker of technology that facilitates digital contracts delivered results that exceeded earnings expectations.

  • Shares of Ulta Beauty Inc. ULTA, -0.59% fell 2.7% after reporting a net sales figure that missed forecasts, though adjusted earnings topped the Wall Street consensus.

  • Cloudera Inc. CLDR, +5.91% shares were on the rise, up over 8%, after the enterprise software company’s third-quarter revenue and adjusted earnings beat expectations.

  • Share of gun maker Smith & Wesson Brands Inc. SWBI, +0.59% were moving 1.5% higher after reporting profit rose in the second quarter of fiscal 2021 as revenue more than doubled in the period.

How are other assets performing?

The pan-European Stoxx 600 index SXXP, +0.54%  was trading 0.4% higher to end the week, while the U.K.’s FTSE 100 index UKX, +0.89% climbed 0.7%.

In Asian markets, China’s Shanghai Composite Index SHCOMP, +0.07%   finished less than 0.1% lower, the CSI 300 finished 0.2% higher, while Hong Kong’s Hang Seng HSI, +0.40%   booked a 0.4% gain. Japan’s Nikkei 225 NIK, -0.21%  ended 0.2% lower on Friday.

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.969%   rose 3.2 basis points to around 0.95%. Yields and prices move in opposite directions.

The ICE U.S. Dollar Index DXY, -0.18%, a gauge of the greenback’s strength against its major rivals, was 0.3% lower, around a two-year low.

Crude-oil future CL.1, +0.87% s  gained 16 cents, or 0.3%, to trade at $45.78 a barrel on the New York Mercantile Exchange. Meanwhile, gold GCG21, +0.31%   rose $7.90, or 0.4%, to trade at $1,849 an ounce.