Stocks End Higher, Set New Highs as Weak Jobs Data Drives Optimism for New Pandemic-Relief Deal

4:35PM ET 12/04/2020 MT Newswires
The market's three main benchmarks ended at record levels on Friday after a weaker-than-expected jobs report for November stoked expectations that lawmakers will reach a long-awaited pandemic-relief deal.

Investors bid up equities after the Department of Labor ahead of the opening bell said that nonfarm payrolls rose by 245,000 last month, slower than October's pace of 610,000 and well under the consensus on Econoday for 500,000. The data arrived as the US has been logging record-high daily new COVID-19 infections.

State and local governments around the country have imposed new restrictions in response to the spikes in cases.

"Job growth has slowed markedly, and this report demonstrates yet again that it's not possible to separate the economy from the virus," said Ian Shepherson, chief economist at Pantheon Macroeconomics. "We hope these numbers will increase the pressure on Congress to act, though nothing they can do will affect December payrolls."

A new $908 billion bipartisan stimulus package has been discussed by Democratic and Republican congressional leaders in recent days. House Speaker Nancy Pelosi said Friday "there is momentum" for an agreement after the jobs data.

McConnell said Thursday after a phone call with Pelosi that both are "both interested in getting an outcome" on the proposal as well as a government spending plan that needs to be passed by Dec. 11.

Energy shares soared 5.4% as crude futures rose after major oil-producing countries agreed the day before to ease production cuts that were to begin next month. West Texas Intermediate gained nearly 0.9% to $46.03 a barrel while international benchmark Brent added about 0.7% to $49.03 a barrel.

Chevron (CVX) rose 3.9% while Occidental Petroleum (OXY) and Diamondback Energy (FANG) each jumped around 13%.

Dow's (DOW) 2.7% gain helped to lift materials 2%. Albemarle (ALB) rose 5.7%, and LyondellBasell (LYB) advanced 4.2%.

Industrials added 1.2%, driven by Caterpillar's (CAT) 4.3% rise and Honeywell International's (HON) 2.1% gain. Flowserve (FLS) added 5.3%.

Financials rose 1.1%, lifted by Goldman Sachs Group's (GS) 1.8% gain and American Express's (AXP) 1.6% advance. Citigroup (C) added 3.6%.

Big Lots (BIG) dropped 11% despite record third-quarter adjusted earnings and comparable-store sales from the retailer.

The Dow Jones Industrial Average rose 0.8% to finish the week 1% higher. The Standard & Poor's 500 added 0.9% to cap the five-day period up 1.7%. The Nasdaq Composite gained 0.7%, ending the week 2.1% higher.