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Stock Market News for Dec 7, 2020

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U.S. stock indexes hit record highs on Friday on hopes of a fresh round of stimulus from Congress to revive the coronavirus-hit economy that gave investors’ confidence a boost. This overshadowed the November jobs report that showed the slowest gain in six months. Friday also marked the first time in nearly three years when all the three major indexes closed at record highs.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.8% or 248.74 points to finish at 30,218.26. The S&P 500 rose 0.9% 0r 32.40 points to end the day at 3,699.12.

The S&P 500 rally was led by energy stocks. All the 11 sectors of the benchmark index closed in positive territory. The Energy Select Sector SPDR (XLE) and Materials Select Sector SPDR (XLB) were the biggest gainers, advancing 5.6% and 2.2%, respectively. Shares of Chevron Corporation (CVX - Free Report) jumped 3.5%, while Caterpillar Inc. (CAT - Free Report) surged 7.6%. Caterpillar has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq gained 0.7% or 87.05 points to close at 12,464.23. This was also the first time since Jan 22, 2018 that all the three benchmarks closed at record highs.

The fear-gauge CBOE Volatility Index (VIX) was down 2.3% to 20.79. A total of 11.4 billion shares were traded on Friday, lower than the last 20-session average of 11.8 billion. Advancers outnumbered decliners on the NYSE by a 3.54-to-1 ratio. On Nasdaq, a 2.95-to-1 ratio favored advancing issues.

Stimulus Hopes Drive Markets

Positive news on the vaccine front have somewhat overshadowed fears of a surge in fresh coronavirus infections and deaths lately. This has to some extent been helping the markets. On Friday, hopes of a fresh round of stimulus from Congress to fight back the economic impact from coronavirus lifted investors’ sentiment.

On Friday, House Speaker Nancy Pelosi said that there has been “momentum” in talks about a fresh round of coronavirus relief package and that the weaker-than-expected November jobs report might make Congress speed up things.

Also, President-elect Joe Biden at a press conference said, “I think it would be better if they had the $1,200 [payments to families].” He added that $1,200 stimulus checks might “still be in play.” Many investors also took the weak job data as a positive toward compelling lawmakers to move forward at a faster pace to get the financial stimulus approved. 

Economic Data

The Labor Department said that the U.S. economy added 245,000 jobs in November, falling well short of estimates of 440,000. This also marks the smallest gain in six months or since the economy started reopening following the coronavirus-induced shutdown. Unemployment rate declined to 6.7% from 6.9%, meeting expectations.

The Commerce Department said that factory orders jumped for the sixth consecutive month in October. Orders for manufacturing goods climbed 1% after increasing 1.3% in the month earlier.

Weekly Roundup

The Wall Street came up with a great weekly performance. The DowJones gained 1% this week, while the S&P 500 rose 1.7%. The Nasdaq gained 2.1% over the same time period. 

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