S&P 500, Nasdaq Close at Records as Weak Jobs Report Boosts Stimulus Bets
The S&P 500 and the Nasdaq closed at records Friday as a disappointing U.S. jobs report led Wall Street to believe that the weak growth could lead to additional coronavirus aid.
The S&P 500 gained 0.39% to close at 3,886, while the Nasdaq rose 0.57% to 13,856. Both indexes also set record intraday highs during the session.
The Dow Jones Industrial Average rose 92 points, or 0.3%, to close at 31,148.
For the week, the Dow gained 3.9%. the S&P 500 surged 4.6% and the Nasdaq leaped 6%.
The U.S. economy added 49,000 jobs in January, a weaker-than-expected number that showed how private-sector employment continued to lag forecasts amid pandemic-linked shutdowns for businesses and factories. December’s report was downwardly revised to a 227,000 decrease.
The unemployment rate last month fell to 6.3% from 6.7% and the labor force participation rate declined.
The weak jobs report has boosted optimism surrounding President Joe Biden’s push for another round of fiscal stimulus for millions of Americans.
Referencing the report, Biden said Friday he sees “a lot of folks reaching the breaking point.”
“I am going to act and I am going to act fast,” he said. He criticized Republicans for being unwilling to recognize the need for a sizable stimulus plan.
The Senate approved a budget bill early Friday that paves the way for Democratic lawmakers in the upper chamber to pass Biden’s $1.9 trillion stimulus bill without Republican support.
“Ultimately, the stock market is anticipating continuing healing in the economy and has been moving higher because of federal stimulus, which arguably is the bigger story,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
“Our concern would be in the short term. The stimulus bill is a buy- the-rumor-sell-the-fact type of situation and the stock market will actually head lower because the good news was already priced in,” he added.
Johnson & Johnson (JNJ) – Get Report finished up 1.5% Friday after the healthcare giant submitted an application with U.S. regulators seeking emergency use authorization for its investigational single-dose covid-19 vaccine candidate.
Peloton Interactive (PTON) – Get Report fell 5.9% Friday after the maker of connected fitness equipment posted first-quarter sales of more than $1 billion but warned that costs to address delivery delays would crimp profits.
GameStop (GME) – Get Report surged 19% and AMC Entertainment (AMC) – Get Report fell 3.7% after Robinhood, the online trading app, removed limits on buying shares of the stocks made popular by the Reddit investor forum WallStreetBets.