Wall Street Ticks Back Toward Highs 12/04 09:13
U.S. stocks are ticking higher and heading back toward record highs on
Friday, despite discouraging data detailing how much damage the deepening
pandemic is doing to the job market.
NEW YORK (AP) -- U.S. stocks are ticking higher and heading back toward
record highs on Friday, despite discouraging data detailing how much damage the
deepening pandemic is doing to the job market.
The much weaker-than-expected jobs report may perversely have been bad
enough to help kick Congress out of its paralysis and deliver more support for
the economy. Hopes also remain deeply rooted on Wall Street that one or more
coronavirus vaccines are on the way to rescue the global economy next year.
The S&P 500 was 0.5% higher in early trading, putting it on pace to erase
its slight loss from the day before and return to a record. The Dow Jones
Industrial Average was up 136 points, or 0.5%, at 30,105, as of 9:43 a.m.
Eastern time, and the Nasdaq composite was 0.2% higher.
The initial reaction in financial markets to November's disappointing jobs
report was to fall. Treasury yields sank, and U.S. stock futures wobbled after
the data showed employers added just 245,000 jobs last month, half of what
economists were expecting. It marked a sharp step down from October's gain of
610,000 and was the fifth straight month of slowing growth.
Economists called the numbers disappointing and evidence that the worsening
pandemic will likely destroy more jobs and income for the economy in the coming
months, which are shaping up to be a bleak winter.
But markets quickly recovered amid expectations that the dour data could
spur some action from Congress, which has dithered for months after much of its
last round of financial support for the economy expired during the summer.
"Overall, today's report is beckoning lawmakers to act on additional fiscal
stimulus measures in order to bridge the output gap in the economy until a
vaccine is deployed, and the longer they hold out the wider the gap may
become," said Charlie Ripley, senior investment strategist for Allianz
Democrats and Republicans have been making on-and-off progress on talks for
another round of support for the economy, including aid for laid-off workers
and industries hit hard by the pandemic. Momentum this week has seemed to swing
back to "on" after Democrats signaled willingness to accept a smaller package
than they were earlier demanding.
House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell spoke
on the phone about a possible deal on Thursday, and lawmakers from both parties
have been voicing support for a bipartisan deal. Many obstacles remain, though.
The hope in markets is that financial support from Washington could help
carry the economy through a dark winter. Surging coronavirus counts,
hospitalizations and deaths are pushing governments around the world to bring
back varying degrees of restrictions on businesses. They're also scaring
consumers away from stores, restaurants and other normal economic activity.
Hopefully, the economy will be able to stand more on its own accord next
year after one or more COVID-19 vaccines help start a slow return to more
Such hopes have helped stocks muscle higher since early November, though the
momentum has slowed a bit recently as the pandemic accelerates at a troubling
rate. The S&P 500 is on pace to close this week with a 1.2% gain, following up
on November's 10.8% surge.
In European stock markets, the German DAX was up 0.1%, while the French CAC
40 rose 0.3%. The FTSE 100 was up 0.7%.
In Asia, Japan's Nikkei 225 slipped 0.2%, but other markets were stronger.
South Korea's Kospi gained 1.3%, Hong Kong's Hang Seng gained 0.4% and stocks
in Shanghai added 0.1%.
The yield on the 10-year Treasury shook off an initial stumble following the
release of the jobs report to rise to 0.96%, up from 0.91% late Thursday.