By Anna Hirtenstein and Michael Wursthorn 

U.S. stocks edged higher during Friday's holiday-shortened session as gains across shares of technology and health-care companies pushed the S&P 500 and Nasdaq Composite to new closing records.

The broad S&P 500 added 8.70 points, or 0.2%, to 3638.35, notching its 26th record close of the year. The Nasdaq Composite added 111.44 points, or 0.9%, to 12205.85, its highest close ever. The Dow edged up 37.90 points, 0.1%, to 29910.37, its third-highest close in history.

The stock market closed at 1 p.m. ET. on Friday and was shut Thursday for the Thanksgiving Holiday.

Markets have been largely buoyant over the handful of trading sessions this week, with the Dow crossing the 30000 mark for the first time Tuesday, even as rising coronavirus infection levels across the U.S. and economic data point to a halting recovery that may curb consumer confidence. Investors appear to be looking ahead to next year, betting that Covid-19 vaccines will curb the pandemic and allow social and business activity to return to normal, along with a rebound in corporate earnings.

"Investors have become uninterested in worrying about downside risks," Citigroup analysts wrote in a note to clients Friday afternoon.

Investors' zeal for stocks amid all of that has pushed the three major benchmarks up more than 2% this week, while gains for November have extended into double-digit percentages. The Dow has added nearly 13% since the end of October, on track to notch its biggest monthly advance since 1987. The S&P 500 and Nasdaq Composite have risen 11% and 12%, respectively, their biggest month-to-date gains since April.

Still, analysts and investors warn that stocks appear to be trading at elevated levels as the coronavirus pandemic worsens. The number of people hospitalized in the U.S. due to Covid-19 surpassed 90,000 for the first time. More than 110,000 new cases were reported around the nation Thursday, sharply lower than totals in recent days. But infection levels are likely to rise again because of large gatherings and reunions for the Thanksgiving Day celebrations.

"There's still a lot of cases and restrictions in the U.S.: a lot of activity is going to stall again," said Samy Chaar, chief economist at Lombard Odier. "This will have an impact potentially on the next job market report," he said, referring to labor-market figures for November that will be released Dec. 4.

One concern that appears to be simmering down is the outcome of the election. President Trump said Thursday that he would leave the White House if the electoral college backs Joe Biden. The president's campaign has lost several legal challenges that allege election fraud, and he has come under pressure from Republicans to accept the results.

"He lost big enough for this election to be very difficult to contest. It's a done deal for markets," said Mr. Chaar. "Everyone is working under the assumption that it will be a Biden administration."

Mr. Biden's decision to pick Janet Yellen as Treasury Secretary added to the market's enthusiasm this week, Citigroup analysts said.

Meanwhile, Black Friday kicks off the traditional start of the crucial holiday shopping season in the U.S. Investors will be closely watching metrics such as e-commerce and mobility data to try to gauge consumer confidence and the extent that the pandemic and historically-high levels of unemployment will weigh on the retail sector.

"Given the difficult year for so many retailers, there's definitely going to be expectations for them to try to play catch up," said Esty Dwek, head of global market strategy at Natixis Investment Solutions. Black Friday "should give a nice bump to the [economic data] numbers."

On Friday, shares of technology stocks in the S&P 500 gained 0.5%, while communications services companies rose 0.6%, two of the stock market's most enduring winners throughout the pandemic.

Health-care stocks, meanwhile, jumped nearly 1%,

Overseas, the pan-continental Stoxx Europe 600 wavered between small gains and losses before closing up 0.4%.

In Asia, most major stock benchmarks gained. The Shanghai Composite Index climbed 1.1%, and Hong Kong's Hang Seng Index added 0.3%. Profits at China's industrial firms in October rose over 28% from a year earlier, an acceleration from the 10% rise the previous month, in yet another sign of the strength of the country's recovery.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Michael Wursthorn at Michael.Wursthorn@wsj.com

 

(END) Dow Jones Newswires

November 27, 2020 14:11 ET (19:11 GMT)

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