Shares are rising regardless of a disappointing job report, heading for the most effective week since November
US stocks rose on Friday, with major averages trying to end their best week since November as investors hoped a disappointing January job report would add the likelihood of further stimulus.
The Dow Jones Industrial Average rose 110 points. The S&P 500 rose 0.3% and the Nasdaq Composite rose 0.2% after both closed at record highs in the previous session. The 30 stock Dow and S&P 500 are on track to post their fifth consecutive positive day.
The Department of Labor said the US created 49,000 jobs in January, slightly less than the 50,000 payroll slips expected by economists. The unemployment rate fell to 6.3% and was thus above the forecast of 6.7%. The December numbers have been revised significantly lower, with the month posting a 227,000 loss from the initial 140,000 job losses.
“The number of jobs was particularly staggering as far fewer jobs were expected,” said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance. “Ultimately, the stock market expects the economy to continue to recover and has moved up on federal incentives, which arguably are the bigger story.”
The Senate passed a budget resolution early Friday as the Democrats press ahead with the process of passing a $ 1.9 trillion coronavirus relief bill with no Republican votes. The package includes stimulus checks worth $ 1,400, additional unemployment benefits, and Covid-19 vaccination and testing funds.
The key averages are well on their way to achieving their best weekly performance since November. The blue chip Dow is up 2% while the S&P 500 and Nasdaq are up 4.6% and 5.6%, respectively. The market rebounded from last week’s heavy losses as the speculative trading frenzy subsided.
“The three pillars of the rally have actually gotten stronger: fourth quarter results continue to exceed expectations dramatically, more stimulus is being given to the economy and the pace of vaccination is accelerating,” said Adam Crisafulli, founder of Vital Knowledge, in a note.
Wall Street is in the middle of a solid profitable season. Of the 184 companies in the S&P 500 that have reported profits so far, 84.2% exceeded analysts’ expectations, according to Refinitiv.
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– CNBC’s Maggie Fitzgerald contributed to the coverage.
Correction: In an earlier version the first reading of the December job report was incorrectly stated It was also incorrectly stated which stock indices are on track to release their fifth consecutive positive day. The indices are the S&P 500 and the Dow.