Stock ETFs Edge Higher Despite Poor Jobs Data | ETF Trends

Stocks and index ETF continue to gain momentum, rallying slightly on Friday despite a lackluster U.S. jobs report, as the major averages are headed for additional weekly gains.

The Dow Jones Industrial Average continued to tread water above the 30,000 level, advancing another 160 points, or 0.53%, while the S&P 500 added 0.63% to hit a new all-time high. The Nasdaq Composite added 0.4%.

Key stock index ETFs like the SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are gaining ground Friday as well.

Energy was the best-performing S&P 500 sector, gaining 3.7%, driving the Energy Select Sector SPDR Fund (XLE) up 4.59%, and the iShares Global Clean Energy ETF (ICLN) slightly higher.

The Latest Jobs Report

Investors reacted to disappointing jobs data by driving markets higher. The U.S. economy gained 245,000 jobs in November, a steep fall from the Dow Jones consensus estimate of 440,000. The unemployment rate, however, matched expectations by falling to 6.7% from 6.9%, which may have boosted markets.

Traders may have also viewed the more anemic jobs number as a positive because it could spur lawmakers to push forward with additional fiscal stimulus, a sentiment echoed by financial pundits and politicians.

Friday’s jobs report data “is beckoning lawmakers to act on additional fiscal stimulus measures in order to bridge the output gap in the economy until a vaccine is deployed and the longer they hold out the wider the gap may become,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Senate minority leader Chuck Schumer tweeted that the “report shows the need for strong, urgent emergency relief is more important than ever.”

Others were able to better-internalize the new figures. JJ Kinahan, chief market strategist at TD Ameritrade, noted the report “was not as bad as it seems” possibly because some of the lost jobs came from the U.S. government as the 2020 Census count concluded.

Kinahan also noted “it’s really hard to estimate what these numbers are going to be when states are going from being completely shut down to being completely open. I think you’re seeing that in the market’s reaction.”

Brad McMillan, CIO for Commonwealth Financial Network, also pointed out that average hours worked “remained strong” last month, “suggesting that overall labor demand remains healthy, and the drop in the unemployment rates suggests the labor market continues to tighten.”

Coronavirus cases continue to spike this week, with the U.S. reporting record numbers of new infections, single-day deaths and hospitalizations on Thursday, just as the stock market was plagued by a report suggesting issues with Pfizer’s coronavirus vaccine rollout. The news caused a sharp drop in stocks near the Thursday close.

The major averages are targeting nearly a month of consecutive gains this week. Entering Friday’s session, the Dow was up a marginal 0.2%, while the S&P 500 had added 0.8% and Nasdaq had climbed 1.4%.

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