The Labor Department's report showed U.S. employment increased more than expected last month as COVID-19 infections over the summer subsided, offering more evidence that economic activity was regaining momentum early in the fourth quarter.
Wall Street’s main indexes hit record highs in a broad-based rally on Friday as data showing strong jobs growth in October, coupled with Pfizer’s COVID-19 pill update, boosted sentiment about economic growth.
Ten of the 11 major S&P sectors advanced in early trading, with economy-sensitive energy, financials and industrials gaining more than 1% each.
The small-cap Russell 2000 index added 1.5%, also scaling a record peak.
The Labor Department’s report showed U.S. employment increased more than expected last month as COVID-19 infections over the summer subsided, offering more evidence that economic activity was regaining momentum early in the fourth quarter.
“Today’s 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,” said Peter Essele, head of portfolio management for Commonwealth Financial Network.
Pfizer Inc jumped 9.3% after the drugmaker’s experimental antiviral pill for COVID-19 cut by 89% the chances of hospitalization or death for adults at risk of developing severe disease.
Shares of Merck slipped 8.6%, dragging the S&P healthcare sector lower.
Travel stocks rose following Pfizer’s announcement, with the S&P 1500 Airlines index climbing 5.5% and cruise operators Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise rising between 7.2% and 5.8%.
“We couldn’t get more positive news … now this does feel like it’s really the end of the pandemic,” said Thomas Hayes, managing member, Great Hill Capital LLC, New York.
“It’s a quick efficacious solution … if you get diagnosed, you just take the pill and you’re back in action so the market loves it, the travel and leisure sector loves it and we love it.”
Among earnings moves, Expedia jumped 11.0% after the online travel agency posted upbeat third-quarter revenue, while Pinterest Inc climbed 3.9% on an upbeat fourth-quarter revenue forecast.
A stellar third-quarter reporting season, coupled with cheery outlook on earnings growth as well as a central bank in no rush to hike interest rates, has boosted investor appetite for equities, helping them look past worries about inflation, supply chain disruptions and labor shortages.
Meanwhile, the U.S. House of Representatives is expected to vote on Friday on the social policy and climate-change bill and a bipartisan infrastructure bill.
At 10:00 a.m. ET, the Dow Jones Industrial Average was up 322.01 points, or 0.89%, at 36,446.24, the S&P 500 was up 34.61 points, or 0.74%, at 4,714.67, and the Nasdaq Composite was up 94.83 points, or 0.59%, at 16,035.14.
Boeing Co gained 3.3% after sources told Reuters investors have reached an agreement with current and former company officers to settle a lawsuit over the safety oversight of the 737 MAX.
Peloton Interactive Inc sank 30.8% after it slashed its full-year sales outlook by up to $1 billion.
Advancing issues outnumbered decliners by a 3.12-to-1 ratio on the NYSE and by a 1.81-to-1 ratio on the Nasdaq.
The S&P index recorded 79 new 52-week highs and no new low, while the Nasdaq recorded 217 new highs and 35 new lows.