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US STOCKS-Wall St hits highs as slowing job growth spurs stimulus bets

Wall Street's main indexes rose to all-time highs on Friday as data showing the slowest U.S. jobs growth in six months raised investors' expectations for a new fiscal relief bill to help revive the coronavirus-hit economy. So-called "cyclical" stocks seen as particularly sensitive to the economy, such as energy, materials and industrials, shined as most S&P 500 sectors rose.

Reuters | Washington DC | Updated: 05-12-2020 02:36 IST | Created: 05-12-2020 02:31 IST
US STOCKS-Wall St hits highs as slowing job growth spurs stimulus bets
Representative image Image Credit: Pixabay

Wall Street's main indexes rose to all-time highs on Friday as data showing the slowest U.S. jobs growth in six months raised investors' expectations for a new fiscal relief bill to help revive the coronavirus-hit economy.

So-called "cyclical" stocks seen as particularly sensitive to the economy, such as energy, materials and industrials, shined as most S&P 500 sectors rose. The Labor Department's closely watched report showed nonfarm payrolls increased by 245,000 jobs in November, below economists' expectations of 469,000 jobs and the smallest gain since the labor recovery started in May.

President-elect Joe Biden said Friday's "grim" jobs report shows the economic recovery is stalling and warned the "dark winter" ahead would exacerbate the pain unless the U.S. Congress passes a coronavirus relief bill immediately. "The bad news of the weakening jobs picture is potentially good news for investors because it means that the stimulus bill is much more likely to take place in a fairly short time frame," said Ryan Detrick, senior market strategist at LPL Financial in North Carolina.

Unofficially, the Dow Jones Industrial Average rose 246.27 points, or 0.82%, to 30,215.79, the S&P 500 gained 32.4 points, or 0.88%, to 3,699.12 and the Nasdaq Composite added 87.05 points, or 0.7%, to 12,464.23. The benchmark 10-year yield hit its highest level since March at over 0.98%, helping support financial shares which are highly sensitive to interest rates.

Energy shares were also bolstered by gains in oil prices, with shares of Diamondback Energy Inc and Occidental Petroleum surging. "There is just a lot of catch-up happening with those sectors and sub-sectors that have really struggled year to date," said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.

Utilities lagged the most among major sectors. Positive coronavirus vaccine updates from drugmakers have raised investor hopes for an economic recovery next year and overshadowed worries over a surge in U.S. infections. (Additional reporting by Shriya Ramakrishnan and Medha Singh in Bengaluru; Editing by Anil D'Silva, Sriraj Kalluvila and Diane Craft)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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