Market Snapshot: U.S. stocks close at all-time highs after Biden promise of more aid offsets worst jobs report since April

• The Dow Jones Industrial Average DJIA, +0.18% closed up 56.84 points, or 0.2%, at 31,097.97 for a new record, after four straight weeks of gains
• The S&P 500 index SPX, +0.55% added 20.89 points to end at 3,824.68, a gain of 0.6%, another new record and the second consecutive week of gains.
• The Nasdaq Composite Index COMP, +1.03% rose 134.50 points, or 1%, to 13,201.98, to also close at a record after four straight weeks of gains.

On Thursday, the market booked a quartet of record closing highs after Congress confirmed President-elect Joe Biden’s election win:

• The Dow rose 211.73 points, or 0.7%, at 31,041.13, closing at records.
• The S&P 500 index closed up 55.65 points, or 1.5%, to reach a record at 3,803.79.
• The Nasdaq climbed 326.69 points, or 2.6%, to reach a milestone at 13,067.48, a closing high.

For the week, the Dow gained 1.6%, the S&P 500 rose 1.8%, and the Nasdaq Composite added 2.4%. The Russell 2000 index snapped a winning streak, closing down 0.3% for the day, but up 5.9% for the week.

What drove the market?

Stocks regained their footing Friday, after initially pulling back in the wake of a jobs report showing that the U.S. economy lost 140,000 jobs in December, well below forecasts for a gain of 55,000.

The U.S. unemployment rate remained unchanged at 6.7%, but data from the Labor Department report also suggests that a number of Americans left the workforce. The decline in employment was the first since last April, when the U.S. lost a 20.8 million jobs in that one month alone

The government report comes after a report on Wednesday from ADP showed the private sector shed 123,000 jobs in December, as consumer and business activity in some states was affected by lockdowns to limit the spread of COVID-19. The government report showed that 95,000 private-sector jobs were lost in December.

Indeed, the U.S. registered record deaths on Thursday, with at least 4,111 lives on Thursday lost from COVID, representing the most in a single day since the start of the outbreak, according to a New York Times tracker, which also came amid a record 280,028 new cases of the disease.

“Measures put in place to stop the spread of COVID-19 had a big impact this month, specifically in the leisure and hospitality sector where payrolls fell 498,000,” wrote Jefferies analysts Thomas Simons and Aneta Markowska, in a note after the data was published. The analysts estimated that if it weren’t for renewed lockdowns payrolls would have showed a gain of 358,000.

The modest moves in Wall Street equities also came after a dramatic political week that included wins by Democrats against incumbent Republicans in the U.S. Senate that shift the balance of power in Congress, along with rioters storming the Capitol building after being encouraged by President Donald Trump to try to block Congress from certifying President-elect Joe Biden’s November win.

However, markets have focused on the political wins by Democrats Jon Ossoff and Raphael Warnock in the Senate runoff elections on Tuesday, which raises the prospect of additional coronavirus fiscal relief measures and other legislation that could boost the U.S. economy after Biden becomes president in 12 days.

Stocks received a boost late Friday after President-elect Joe Biden called for extra financial relief for Americans “now” after the latest U.S. jobs report showed losses for the first time in eight months, a reflection of the continued toll the coronavirus pandemic is taking on the economy.

“The market is looking forward, saying that with the ‘blue ripple,’ they’re looking forward to additional fiscal stimulus,” said Sam Stovall, chief investment strategist with CFRA, in an interview. “But I think the market is also acknowledging that it has already anticipated much of this, and we are now trading at extreme valuations.”

Other analysts agreed that the stock market was looking past the week December jobs report and the resurgence of the coronavirus pandemic and focusing on further fiscal stimulus and a vaccine rollout. “This (jobs) report ensures that there will be increased fiscal spending on relief / stimulus checks sent out,” said Quincy Krosby, chief market strategist at Prudential.

Optimism about coronavirus vaccine distribution was boosted when Pfizer Inc. PFE, +0.19%  and German partner BioNTech SE BNTX, +7.15%  said Friday an in vitro study found that their COVID-19 vaccine neutralizes the two new highly infectious variants that have emerged in the U.K. and South Africa. 

But worries that the vaccines that have been authorized aren’t being rolled out efficiently are raising some concerns about how quickly the economy and jobs market can bounce back among Wall Street strategists.

“With 3/4 of the vaccines now available not being utilized for inoculations, the need for a coordinated effort to improve the rollout is dramatic,” wrote Krosby. “The employment landscape will not improve until the speed of vaccinations gains momentum,” the analyst said.

Which stocks were in focus?

• Bionano Genomics Inc. BNGO, -6.00%  said Friday it has priced an underwritten public offering of 29 million shares at $3.05 a share. Shares lost 6%.
• Shares of Hologic Inc. HOLX, +3.23%  rose 3.2% Friday after the medical technology company posted preliminary revenue figures ahead of the consensus forecast.
• Bed Bath & Beyond Inc.  BBBY, +1.12%  said in a filing that it has entered into a share repurchase agreement with JPMorgan in which the home goods retailer will acquire $150 million shares. Shares closed 1.1% higher.
• Acacia Communications Inc.  ACIA, +9.87%  said Friday morning that it opted to terminate its merger agreement with Cisco Systems Inc CSCO, +0.22%. Shares of Acacia gained nearly 10% and Cisco shares gained 0.2%.
• Apple Inc.‘s shares AAPL, +0.86% were in focus as reports pointed to potential joint ventures for the iPhone maker’s electric-vehicle ambitions. The stock rose 0.9%.

How did other assets fare?

• The 10-year Treasury note TMUBMUSD10Y, 1.120%  was up nearly 5 basis points at 1.13%, as traders bet on stronger inflation pressures. Bond yields rise as prices fall.
• Oil futures traded higher Friday. Crude for February delivery CLG21, +3.74%  gained 3.3% to $52.50 per barrel.
• Gold futures  GC00, -3.34% tumbled 3.5% to trade at $1,847.2 an ounce.
• The pan-European Stoxx 600 Europe index SXXP, +0.66% closed 0.7% higher, while London’s FTSE 100 UKX, +0.24%  rose 0.2%.
• In Asia, Hong Kong’s Hang Seng Index HSI, +1.20%  rose 1.2%, while the Shanghai Composite SHCOMP, -0.17%    shed 0.1% and Japan’s Nikkei 225 NIK, +2.36%   rose 2.4%.
• The ICE U.S. Dollar Index DXY, +0.27%,   a measure of the U.S. currency against a basket of six major rivals, was up 0.3%.

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