By Karen Langley, Caitlin Ostroff and Frances Yoon 

U.S. stock indexes headed for records Friday as this week's revival of stimulus negotiations bolstered expectations that the economy can weather the pandemic's continued spread.

The Dow Jones Industrial Average gained 0.6%, or about 185 points, putting it on pace for a new record and its second close over 30000. The S&P 500 rose 0.7%, and the tech-heavy Nasdaq Composite added 0.6%, with both indexes also on pace for new highs.

Investors have watched closely in recent days as momentum grows in Washington for a new coronavirus aid package. President Trump's top economic adviser, Larry Kudlow, urged legislators Friday to act quickly. Congressional leaders said a day earlier that a compromise was within reach.

"You are still looking at an economy that is in pain," said Amy Kong, chief investment officer at Barrett Asset Management. "You want to make sure that the household income is continuing on, or the momentum is there, because I believe once household income gets to a level where it impacts confidence, it's going to be hard to get folks to spend again."

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.

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 1.5% for the week, while the Dow industrials are on pace for a 0.8% weekly gain.

"The market is now pausing a little bit, but the underlying story is still intact -- that there is basically a global recovery," said Luca Paolini, chief strategist at Pictet Asset Management. "It is difficult to see what can change this kind of positive outlook for equities."

Among individual stocks, shares in DocuSign gained 5.6% after the company provided guidance that topped analysts' expectations. Ulta Beauty shares declined 2.5% 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 rose to 0.969%, from 0.919% on Thursday.

Brent crude futures, the global benchmark for oil markets, climbed 0.9% to $49.13 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.

Write to Karen Langley at karen.langley@wsj.com, Caitlin Ostroff at caitlin.ostroff@wsj.com and Frances Yoon at frances.yoon@wsj.com

(END) Dow Jones Newswires

December 04, 2020 12:21 ET (17:21 GMT)

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