US stocks climb to new records as jobs data shows labor-market recovery after dismal September report

New York Stock Exchange floor
New York Stock Exchange floor AP Photo/Richard Drew
  • US stocks notched new record highs as an upbeat jobs report boosted economic optimism.
  • The economy added 531,000 jobs to nonfarm payrolls in October, beating the median forecast for a gain of 450,000.
  • Positive results on Pfizer’s COVID-19 pill also helped spark a broad rally among travel-related stocks.
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US stocks set fresh records Friday as an upbeat jobs report and hopes for a new coronavirus treatment boosted economic optimism in the country.

The S&P 500 closed at an all-time high for the 64th time this year and ended the week higher for the fifth straight time – the benchmark index’s longest positive streak since August 2020. The tech-heavy Nasdaq Composite also rallied for the 10th consecutive day while the Dow Jones Industrial Average led gains among the top indexes.

Positive results on Pfizer‘s COVID-19 pill also helped spark a broad rally among travel-related stocks, such as aviation, casinos, cruise lines and hotels. Shares of the drug giant soared as much as 11% after a trial showed the pill cut the risk of severe COVID-19 by 89%.

Here’s where US indexes stood at the 4:00 p.m. close on Friday:

Data from the Bureau of Labor Statistics Friday showed 531,000 jobs were added to nonfarm payrolls in October, beating the median forecast for a gain of 450,000 from economists surveyed by Bloomberg.

It also showed job creation rebounding from September’s pace, which was revised to 312,000 from 194,000. The October print, which came as the Delta wave eased further, marks the strongest month of job creation since July and follows two consecutive months of disappointing gains.

Equities have, thus far, been boosted by strong third-quarter earnings despite headwinds such as supply-chain constraints and persistent labor shortages, said Mike Loewengart, managing director of investment strategy at E-Trade Financial.

The Federal Reserve’s pledge for “patience” in raising interest rates on Wednesday has also set the stage for a robust stock market performance.

“Today’s release flashed a green light for investors, signaling that any immediate concerns are unwarranted,” Peter Essele, head of portfolio management for Commonwealth Financial Network, said in a note on Friday. “The release is an affirmation that the economy is on the right footing and there exists a possibility that the Santa Claus rally could be one of the strongest in recent memory.”

About half of third-quarter earnings have already been reported, showing 42% year-on-year EBITDA growth and a 17% rise quarter-on-quarter, Bank of America said Friday.

Nvidia extended its two-day rally to 17% after Wells Fargo touted massive metaverse-related growth potential for the chipmaker and raised its price target.

Peloton plunged 34% to mark its biggest one-day drop after weak quarterly earnings, shedding as much as $US8 ($AU11) billion in market cap. But JPMorgan in a Friday note said a strong holiday season could help propel the stock by as much as 60% next year.

The yield on 10-year Treasury notes slipped to 1.446% Friday, the first time it closed below 1.5% in a month. It is down compared to Thursday’s 1.524%. Yields move inversely to bonds.

In cryptocurrencies, there was a new victim of a fake press release: Kroger. The American grocery chain confirmed it is not accepting bitcoin cash, debunking a fake press release. The incident was an almost exact replay of what happened to Walmart in September.

Meanwhile, oil prices rose after the Organization of the Petroleum Exporting Countries and its partners agreed to increase joint production by 400,000 barrels a day, as had been planned, shunning pressure from President Joe Biden for a bigger increase.

West Texas Intermediate crude oil rallied 3.15% to $US81.29 ($AU110) per barrel. Brent crude, oil’s international benchmark, climbed 2.59% to $US82.63 ($AU112) per barrel.

Gold gained 1.31% to $US1,814.94 ($AU2,450) per ounce.