With traders shrugging off weaker than expected jobs data, stocks have moved mostly higher in morning trading on Friday. The upward move on the day has lifted the major averages to new record intraday highs.
The major averages have seen further upside in recent trading, reaching new highs for the session. The Dow is up 160.25 points or 0.5 percent at 30,129.77, the Nasdaq is up 57.16 points or 0.5 percent at 12,434.35 and the S&P 500 is up 24.56 points or 0.7 percent at 3,691.28.
The strength on Wall Street comes despite the release of a report from the Labor Department showing much weaker than expected job growth in the month of November.
The Labor Department said non-farm payroll employment rose by 245,000 jobs in November after jumping by a downwardly revised 610,000 jobs in October.
Economists had expected employment to increase by 469,000 jobs compared to the addition of 638,000 jobs originally reported for the previous month.
Despite the weaker than expected job growth, the unemployment rate dipped to 6.7 percent in November from 6.9 percent in October. The unemployment rate was expected to edge down to 6.8 percent.
However, the bigger than expected drop in the unemployment rate came as a 400,000-person decline in the labor force far outpaced the 74,000-person drop in the household measure of employment.
“The latter is not too much of a concern given it follows a 2.3 million gain in October, but the drop in the labor force, which is now 4 million below its pre-pandemic level, is a worrying sign that the unemployed are giving up looking for work,” said Michael Pearce, U.S. Senior Economist at Capital Economics.
Continued optimism about coronavirus vaccines may be helping traders shrug off the disappointing jobs data, as the slowdown in job growth came amid the recent surge in new cases and subsequent restrictions.
Traders may also be hoping that the weaker than expected job growth will spur lawmakers in Washington to finally pass a new fiscal stimulus bill.
In a post on Twitter, Senate Minority Leader Chuck Schumer, D-N.Y., said the jobs data “shows the need for strong, urgent emergency relief is more important than ever.”
Democratic and Republican leaders have resumed negotiations over a new stimulus bill, although it remains to be seen if they can reach an agreement after months of stagnation.
Energy stocks have shown a substantial move to the upside, benefiting from an increase by the price of crude oil. Crude for January delivery is rising $0.50 to $46.14 a barrel.
Reflecting the strength in the energy sector, the NYSE Arca Oil Index is up by 5.2 percent, the Philadelphia Oil Service Index is up by 5 percent and the NYSE Arca Natural Gas Index is up by 4.2 percent.
Considerable strength has also emerged among steel stocks, as reflected by the 3.2 percent jump by the NYSE Arca Steel Index. The index has reached its best intraday level in two years.
Computer hardware, brokerage and networking stocks are also seeing significant strength, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has advanced by 0.9 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.1 percent.
In the bond market, treasuries have come under pressure despite the weaker than expected jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.1 basis points at 0.981 percent.
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