Dow, S&P 500 and Nasdaq hit all-time highs after stronger-than-expected October jobs report

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MARKET SNAPSHOT

U.S. stocks rose Friday, with major indexes pushing further into record territory after a stronger-than-expected October jobs report.

Pfizer Inc. shares surged as the vaccine maker released a study of its COVID antiviral drug suggesting it is successful in combating the illness.

How are stock-index futures trading?

  • The Dow Jones Industrial Average rose 232.69 points, or 0.6%, to 36,356.92.
  • The S&P 500 was up 31.60 points, or 0.7%, at 4,711.66.
  • The Nasdaq Composite advanced 95.41 points, or 0.6%, to 16,035.72.

On Thursday, the Dow Jones Industrial Average snapped a five-day winning streak, while the S&P 500 and Nasdaq Composite each logged a sixth straight record close.

What’s driving the market?

The U.S. economy created 531,000 jobs in October, the Labor Department said. Economists surveyed by The Wall Street Journal had forecast a rise of 450,000. The unemployment rate fell to 4.6% last month from 4.8%. Also, September job gains were raised to 312,000 from a previous estimate of 194,000, while August jobs were raised to 483,000 from 366,000.

“Payrolls surged in October with the trifecta of waning COVID concerns, back-to-school season, and declining unemployment benefits contributing to a strong uptick in hiring,” Peter Essele, Head of Portfolio Management for Commonwealth Financial Network, said. “Notable increases came from goods-producing industries like construction and manufacturing, a sign that the recovery is permeating industries beyond the work-from-home segments of the economy. Transportation and trade also experienced strong gains, which could help supply-chain bottlenecks ahead of the holiday shopping season.”

“Today’s release flashed a green light for investors, signaling that any immediate concerns are unwarranted,” he added. “The release is 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.”

However wages were up nearly 5% year over year, which can be a harbinger of stickier inflation. “If we continue to see strength in wage numbers going forward, it may catalyze the Fed to get more aggressive on taper and could pull forward rate hike expectations next year,” Cliff Hodge, Chief Investment Officer for Cornerstone Wealth, noted.

Investors were also sifting through a heavy slate of corporate earnings reports as the busiest portion of what’s been an upbeat third-quarter earnings season comes to an end.

September consumer credit will be released at 3 p.m. Eastern.

What companies are in focus?

  • Pfizer shares climbed 9% after the pharmaceutical company said its COVID antiviral reduced the risk of hospitalizations or death by 89% in a Phase 2/3 study.
  • Shares of rival Merck & Co. Inc. fell 9%. Merck said last month that its experimental treatment reduced the risk of hospitalization or death by 50% in a late-stage trial. It has already submitted an application to U.S. regulators for authorization.
  • Shares of Peloton Interactive Inc. tumbled 34% after the exercise equipment maker producted a weaker-than-expected holiday outlook and cut its full-year forecast.
  • Shares of Uber Technologies Inc. UBER were up 4%, after the ride-hailing company late Thursday said that third-quarter revenue grew in both of its major businesses across all regions as COVID-19 restrictions eased, though losses also more than doubled.
  • Lions Gate Entertainment Corp. shares rose 11% after the media group said it’s mulling a sale or spinoff of its Starz unit.
  • Airbnb Inc. shares rose 9.2% after the travel-booking company posted its highest-ever quarterly revenue and net income.
  • Pinterest Inc. stock rose 3.1% after reporting strong sales and earnings, but fewer-than-expected monthly users.
  • Square Inc. SQ late Thursday reported lower-than-expected revenue for the third quarter as less volatile pricing for bitcoin affected demand, though the company’s chief financial officer noted “strength” in volume during October. Shares rose 3.2%.
  • Shares of Shake Shack Inc. SHAK rose 16.5% after its outlook and weaker-than-expected revenue overshadowed a smaller-than-expected loss.
  • GoPro Inc. GPRO late Thursday delivered results that beat expectations for its most recent quarter and expressed confidence in its ability to hit its full-year targets, despite a continuing supply crunch that may limit upside. Shares rose more than 6%.
  • Online auto retailer Carvana Co. CVNA shares fell 5.7% after it said a continued wave of demand for used cars nearly doubled its quarterly revenue, though efforts to build inventories saw it run against “significant operational constraints.”

How are other assets trading?

  • The yield on the 10-year Treasury note BX:TMUBMUSD10Y fell 3 basis points to 1.493%. Yields and debt prices move in opposite directions.
  • The ICE U.S. Dollar Index   a measure of the currency against a basket of six major rivals, rose 0.2%.
  • Oil futures were rebounding from Thursday’s losses. The U.S. benchmark CL00 CLZ22 up 1.6% at $80.04 a barrel. Gold futures GC00 were up 0.6% at $1,804.60 an ounce.
  • The Stoxx Europe 600 rose 0.3%, while London’s FTSE 100 gained 0.5%.
  • The Shanghai Composite fell 1%, the Hang Seng Index lost 1.4% and Japan’s Nikkei 225 declined 0.6%.
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