Construction workers talk at a USA Properties Fund site on Feb. 2, 2021, in Simi Valley, Calif.
U.S. stocks closed at new records on Friday after their best week in months, as Wall Street looked past disappointing January jobs growth and focused instead on government stimulus and vaccine news.
The S&P 500 gained 15.09 points, or 0.4%, to 3,886.83, a new record. The Nasdaq Composite rose 78.55 points, or 0.6%, to 13,856.30, also a new high. The Dow Jones Industrial Average climbed 92.38 points, or 0.3%, to 31,148.24, just shy of its all-time closing high from Jan. 20. Small-cap stocks outperformed, with the Russell 2000 gaining 1.4%.
It was the second-straight day of new highs for the S&P and Nasdaq, driven by earnings news and optimism about the vaccine and stimulus.
The Nikkei 225 index rose 1.5%, though it was a mixed day in Asia elsewhere. The Stoxx Europe 600 Index was flat.
U.S. stocks advanced despite nonfarm payrolls data that showed lackluster jobs growth in January. The U.S. created 49,000 jobs in January, while economists polled by FactSet expected 100,000 new jobs. And December’s monthly job loss was actually greater than originally reported, according to the report, with 227,000 losses instead of the original 140,000 losses. Economists at Jefferies wrote that continued job losses in the service industry reflected lockdowns in states including California and argued they would be short-lived.
“We expect that we will see [service and hospitality] jobs return in next month’s data, which should really change the tone for the labor market,” they wrote. “We characterized January as a ‘transition month’ in [an earlier note], and the data is consistent with that notion.”
Further, the weak jobs data may highlight to lawmakers the need for further stimulus. The U.S. Senate approved a budget resolution that will allow for a fast tracking of the $1.9 trillion coronavirus relief plan proposed by the Biden administration to be approved without Republican support. Growth-sensitive sectors gained on Friday, with materials stocks in the S&P 500 gaining 1.7%.
Investors are also welcoming upbeat vaccine news, after Johnson & Johnson (ticker: JNJ) said it was seeking emergency U.S. authorization for its single-dose Covid-19 vaccine. Last week, the medical devices company, whose shares were up 1.5%, said its vaccine was 66% effective in preventing moderate to severe cases of the disease.
Investors have also been encouraged by signs of falling cases and deaths on both sides of the Atlantic and hopes that economies will be able to gather strength in coming months. That was reflected in macro markets: West Texas Intermediate crude-oil futures gained 1.1% to $56.85 a barrel, a new 52-week high, and the 30-year Treasury yield advanced four basis points (hundredths of a percentage point) to 1.97%.
Among stocks on the move, shares of Snap (SNAP) rose 9.1% after the parent of social-media group Snapchat beat Wall Street forecasts for its latest quarterly earnings.
GoPro (GPRO) shares fell 19.1% after the maker of action cameras posted disappointing revenue for the holiday quarter.
Ford (F) shares rose 1.2% after the car maker posted a sizable earnings-per-share figure of 34 cents, while Wall Street was expecting a 7-cent loss. The company said revenue was $33.2 billion, versus estimates of $33.9 billion.
Peloton (PTON) shares were down 5.9%. While the company’s earnings topped analysts’ estimates, it faced lofty expectations from Wall Street after a roughly 350% 12-month gain.
Activision Blizzard (ATVI) shares popped 9.6% after the videogame publisher reported fourth-quarter net bookings that topped expectations, rising 13% to $3.05 billion.
MSG Networks (MSGN) shares rose 4.5% after Macquarie upgraded the stock to Outperform from Neutral.
Write to Alexandra Scaggs at [email protected]