President Joe Biden's drive to enact a $1.9 trillion coronavirus aid bill gained momentum on Friday with the U.S. House of Representatives set to vote on a budget plan that would allow the passage of the legislation in coming weeks without Republican support.
The S&P 500 and the Nasdaq hit record highs on Friday on signs of progress towards more economic stimulus, while a closely watched jobs report confirmed the labor market was stabilizing.
Still, U.S. employment growth rebounded less than expected in January and job losses in December were deeper than initially thought, strengthening the argument for additional relief money to aid the recovery from the COVID-19 pandemic.
President Joe Biden’s drive to enact a $1.9 trillion coronavirus aid bill gained momentum on Friday with the U.S. House of Representatives set to vote on a budget plan that would allow the passage of the legislation in coming weeks without Republican support.
“The market has priced in this Goldilocks scenario that we’re going to get past COVID and we’re all going to go back to normal,” said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.
“It’s just a matter of how quickly that recovery comes.”
Economy-linked materials and energy led gains among major S&P sectors. The small-cap Russell 2000 index , sensitive to the domestic economic outlook, gained 0.8%.Johnson & Johnson rose 2% after the drugmaker said it had asked U.S. health regulators to authorize its single-dose COVID-19 vaccine for emergency use.
Stimulus talks, upbeat earnings and progress in vaccine rollouts have bolstered bets of a speedy economic recovery, setting the S&P 500 and the Nasdaq on track for their best weeks since the U.S. election in early November.
A retail trading frenzy also appeared to fade after upending markets last week. Videogame retailer GameStop Corp’s shares, which have shed more than 80% of their value this week, were up 1% at $60.77.
Stronger-than-expected corporate results so far in the fourth quarter have driven up analysts’ expectations, and S&P 500 companies are now on track to post earnings growth for the quarter instead of a decline as initially expected.
At 9:40 a.m. ET, the Dow Jones Industrial Average rose 148.87 points, or 0.48%, to 31,204.73, the S&P 500 gained 14.20 points, or 0.37%, to 3,885.94 and the Nasdaq Composite increased 15.83 points, or 0.11%, to 13,793.57.
Chamath Palihapitiya-backed Clover Health Investments Corp said it had received a letter from the U.S. Securities and Exchange Commission following a critical report published by noted short-selling specialist Hindenburg Research.
Clover’s shares dropped about 3%, extending losses from the previous session’s 12% plunge.
Activision Blizzard Inc jumped about 12% after the company forecast full-year adjusted revenue above analysts’ estimates, driven by strong demand for the latest installment of its blockbuster “Call of Duty” franchise.
Advancing issues outnumbered decliners by a 3.3-to-1 ratio on the NYSE and by a 2.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 25 new 52-week highs and no new low, while the Nasdaq recorded 242 new highs and three new lows.