Stock ETFs Climb Again Friday Despite Lackluster Jobs Data | ETF Trends

Stocks and index ETFs are mixed on Friday, with the S&P 500 and Nasdaq Composite climbing to fresh highs, while the Dow is struggling, after a data report revealing that the U.S. economy unexpectedly lost jobs last month.

After struggling on the first day of the new year, the benchmarks have righted themselves, with subsequent gains placing the key indexes on target to finish the first trading week of 2021 in the green.

The S&P 500 added 0.4% to hold above the 3800 level, while the Nasdaq Composite rallied 0.86%. The Dow Jones Industrial Average traded slightly below breakeven.

Some of the major stock ETFs are breaking to higher ground on Friday as investors move political uncertainties earlier in the week. The SPDR Dow Jones Industrial Average ETF (DIA) is off by 0.18%, but the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) are both advancing just after noon EST.

Consumer discretionary and real estate stocks led the S&P 500 higher, with both sectors gaining over 1% each and boosting ETFs like the ProShares Online Retail ETF (ONLN).

Unexpected Job Losses in Latest DoL Report

Markets seemed largely unfazed by the fact that the U.S. economy shed 140,000 jobs in December, according to the Labor Department. Economists polled by Dow Jones had projected an increase of 50,000. The numbers may reflect changes in the workforce due to the recent spike in coronavirus cases across the country, along with more stringent efforts by the government to curtail the surge.

Over 21.5 million coronavirus cases have now been confirmed in the U.S., according to data from Johns Hopkins University. This includes over 3,800 deaths per day in the country, according to the CDC data tracker.

Adam Crisafulli, founder of Vital Knowledge, wrote that the anemic jobs print elevates the possibility of additional government aid from President-elect Joe Biden’s administration.

“Biden’s team was already going to be pushing for increased fiscal stimulus and the December report provides them w/even more ammunition to make their case (while the Fed may stop thinking aloud about thinking about tapering),” Crisafulli said in a note to clients.

Stocks started off the new year by dropping precipitously on Monday, but stocks and index ETFs have since driven higher, pushing aside the turmoil in Washington, where pro-Trump protesters stormed the Capitol on Wednesday, delaying the procedural congressional confirmation of Presidential-elect Joe Biden’s victory.

Nevertheless, the Dow and S&P 500 are on track to close out four-day winning streaks, and are both up more than 1% week to date. Nasdaq is looking for a two-day rally.

Gary Schlossberg, a global strategist at the Wells Fargo Investment Institute, said the market’s recent moves could be strengthened by growth in corporate earnings this year.

“We think that some of the optimism will be manifested to some extent by improved earnings growth, and maybe the market is pricing in some of that as well of late, but we still think that gives the market some added mileage,” Schlossberg said.

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