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Wall Street Opens Higher as Jobs Data Highlight Economy Strength; Dow up 300 Pts

Stock MarketsNov 05, 2021 14:24
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Friday with cyclicals outperforming after a strong labor market report for October showed the U.S. economy in robust health. 

By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 308 points, or 0.9% at 36,432 points, a new record high. The S&P 500 and Nasdaq Composite both followed, rising 0.7% and 0.5% respectively.

Earlier, the Labor Department said that the U.S. economy created 531,000 nonfarm jobs net in the month through mid-October, well above consensus forecasts of 450,000. It also revised up September's surprisingly weak figure by nearly 120,000 to 312,000. The data showed that the summer slowdown due to the Delta-variant wave of Covid-19 has almost certainly been overcome. 

At the same time, average hourly earnings growth slowed to 0.4% from 0.6%, in September, meaning that there was no fresh scare about inflationary pressures at the end of a week when Federal Reserve Chairman Jerome Powell had faced down pressure to accelerate the timeframe for tightening monetary policy. 

Travel and transportation names were among the biggest gainers, after Uber joined rival Lyft (NASDAQ:LYFT) in posting a sharp improvement in operating numbers - even though it still lost $2.4 billion in the three months through September due to a massive write-down of its equity stake in Chinese peer Didi Global. Uber  (NYSE:UBER) stock rose 6.7%.  The broader travel industry was also lifted by strong numbers from Airbnb (NASDAQ:ABNB), whose stock rose 9.8% in response. 

Arguably the most powerful factor supporting the sector came from pharma giant Pfizer (NYSE:PFE), which reported that its experimental antiviral drug for treating Covid-19 had shown a high degree of effectiveness in treating Covid-19. Pfizer is the second company to make significant progress in bringing an oral antiviral for Covid-19 to market, after Merck last month. Pfizer said its drug had shown an 89% success rate in reducing severe disease, compared to only 50% shown by Merck's drug molnupravir.

Pfizer stock rose 8.9%, while Merck (NYSE:MRK) stock fell 8.7%. Pure-play vaccine stocks also suffered, on perceptions that the widespread availability of antiviral pills will depress long-term demand for vaccination. Novavax (NASDAQ:NVAX) stock fell 11.6%, while Moderna (NASDAQ:MRNA) stock and BioNTech stock plunged another 19.5% and 17.6% respectively, both hitting four-month lows. 

The news also lifted airline and cruise stocks: Norwegian Cruise Line (NYSE:NCLH) stock rose 7.3% while United Airlines (NASDAQ:UAL) stock rose 4.4%. 

There were further signs of the pandemic receding elsewhere, too. Peloton Interactive (NASDAQ:PTON) stock fell 32% after it cut its revenue guidance in an admission that customers are returning to pre-pandemic patterns of exercise faster than it thought. It noted that user engagement with its fitness equipment had fallen markedly in the last quarter, as people returned to gyms or simply eased up on their home fitness regimes.

Penn National Gaming (NASDAQ:PENN) stock rose 8.0%, clawing back some of the 20% losses it suffered on Thursday after Business Insider published anonymized accusations alleging Barstool Sports founder Dave Portnoy of sexual violence. Portnoy disputes the allegations.

 

 

Wall Street Opens Higher as Jobs Data Highlight Economy Strength; Dow up 300 Pts
 

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Mareks Boriss
Mareks Boriss Nov 05, 2021 18:20
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Guys are you living in a dream? With biggest dept bubble...
 
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