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Wall Street at record high as dismal jobs data spurs stimulus bets

Kitco News

(Reuters) - Wall Street’s main indexes jumped to all-time highs on Friday as data showing the slowest jobs growth in six months reinforced investors expectations for a new fiscal stimulus bill to help revive the economy from its worst downturn in decades.

All the 11 S&P 500 sector indexes rose, with value stocks such as energy and financials, which have lagged the broader market this year, leading the gains.

Occidental Petroleum Corp and Chevron Corp climbed about 3% each, lifted by a rise in crude prices, as major oil producers agreed on a compromise to extend the bulk of existing supply curbs.

The Labor Department’s closely watched report showed nonfarm payrolls increased by 245,000 jobs in November, the smallest gain since the jobs recovery started in May. Nonfarm payrolls rose by 610,000 in October.

Analysts said the dismal report could spur policymakers to push harder for a stimulus bill as more than 13 million people were due to lose their government-funded unemployment benefits on Dec. 26 without quick action by Congress.

“The bad news of the weakening jobs picture is potentially good news for investors because it means that the stimulus bill is much more likely to take place in a fairly short time frame,” said Ryan Detrick, senior market strategist at LPL Financial in North Carolina.

At 11:21 a.m. ET, the Dow Jones Industrial Average rose 158.14 points or 0.53% to 30,127.66, the S&P 500 gained 22.68 points or 0.62% to 3,689.40 and the Nasdaq Composite gained 51.20 points, or 0.41% to 12,428.14.

A $908 billion coronavirus aid plan gained momentum in the Congress on Thursday after a months-long standoff between Republicans and Democrats over the size of the potential package.

The two parties also face a Dec. 11 deadline to pass a $1.4 trillion budget or risk a shutdown of the government.

Positive vaccine updates from major drugmakers have eased worries around grim economic data and a surge in infections, setting Wall Street’s main indexes for another week of gains after the benchmark S&P 500 clocked its best November.

The U.S. Food and Drug Administration’s chief said on Friday he had a “robust discussion” with the White House this week about the timeline for COVID-19 vaccine approvals and believes vaccinating 20 million Americans this year is realistic.

Advancing issues outnumbered decliners by 3.3-to-1 on the NYSE and by 2.5-to-1 on the Nasdaq.

The S&P 500 posted 39 new 52-week highs and no new lows while the Nasdaq recorded 279 new highs and 13 new lows.

Reporting by Shriya Ramakrishnan and Medha Singh in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila

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