U.S. Stocks Climb as Investors Bet on Stimulus
December 04 2020 - 10:36AM
Dow Jones News
By Caitlin Ostroff and Frances Yoon
U.S. stocks rose Friday as investors hoped new data showing a
slowdown in the labor market's recovery would fuel prospects for
additional fiscal stimulus.
The Dow Jones Industrial Average gained 0.4%, or about 115
points, putting it on pace for a new record and its second close
over 30000. The S&P 500 added 0.4%, and the tech-heavy Nasdaq
Composite edged up 0.3%, with both indexes also on pace for new
records.
Investors this week have closely followed the revival of
negotiations in Washington over a new coronavirus aid package. They
are also monitoring data on Covid-19 infections and deaths, as well
as reports about progress toward vaccine approval and
distribution.
Figures released Friday by the Bureau of Labor Statistics showed
that employers added 245,000 jobs last month, down from the 638,000
jobs added in October and below economists' expectations. The
unemployment rate declined to 6.7% from 6.9% in October.
"The jobs report's important," said Tom Hainlin, national
investment strategist at U.S. Bank Wealth Management. "But it just
kind of confirms what we're seeing, which is there's only so much
recovery we're going to see until we can get the economy fully
reopened."
Newly reported Covid-19 cases in the U.S. hit a record high
Thursday, as did deaths reported in a day, as the global death toll
from the coronavirus pandemic passed 1.5 million. Hospitalizations
also hit a record, with 100,667 people in the U.S. admitted as of
Thursday, according to the Covid Tracking Project.
"From a market perspective, it's all about that starting point.
Once you see a vaccine allowing stronger returns to activity, it's
about how much of a dip you have to recover from," said Hugh
Gimber, a strategist at J.P. Morgan Asset Management.
Investors are increasingly optimistic about momentum for a
roughly $900 billion compromise Covid-19 relief plan to be pushed
through Congress before the Christmas holiday, though differences
remain over parts of the proposal.
"If there is an agreement, the message is the Republicans and
the Democrats can work together," said Luca Paolini, chief
strategist at Pictet Asset Management. "Once the communication
lines are established, it's easier to do more if you need it."
Trading in stocks this week has been mixed following last
month's rally, when investors cheered progress in Covid-19
vaccines. The S&P 500 is up 1.2% for the week, while the Dow
industrials are on pace for a 0.6% weekly gain.
"The market is now pausing a little bit, but the underlying
story is still intact -- that there is basically a global
recovery," Mr. Paolini said. "It is difficult to see what can
change this kind of positive outlook for equities."
Among individual stocks, shares in DocuSign gained 10% after the
company provided guidance that topped analysts' expectations. Ulta
Beauty shares declined 1.7% after its chief executive said the
company is expecting fourth-quarter comparable-store sales to fall
between 12% and 14%.
In bond markets, the yield on the 10-year U.S. Treasury note
ticked up to 0.969%, from 0.919% on Thursday.
Brent crude futures, the global benchmark for oil markets,
climbed 1% to $49.20 a barrel after OPEC and a group of Russia-led
oil producers agreed to increase their collective output by 500,000
barrels a day next month.
The world's biggest producers are betting that the worst of a
pandemic-inspired shock to demand is behind them after curtailed
travel weighed heavily on oil prices this year.
Overseas, the pan-continental Stoxx Europe 600 rose 0.6%. The
Nikkei declined 0.2%. The Shanghai Composite was flat.
In Hong Kong, shares of China National Offshore Oil and
Semiconductor Manufacturing International dropped over 2% after the
U.S. Defense Department added the state oil giant and chip maker to
a list of nearly three dozen companies the U.S. says helps the
country's military. Overall, the Hang Seng Index rose 0.4%.
The blacklist, which the U.S. launched last month, has hit
stocks and bonds of the targeted Chinese companies. Index compilers
FTSE Russell, JPMorgan and MSCI are rethinking their stance on
these securities targeted by the U.S. government and have been
collecting investor feedback.
Karen Langley contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Frances
Yoon at frances.yoon@wsj.com
(END) Dow Jones Newswires
December 04, 2020 10:21 ET (15:21 GMT)
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