Nasdaq, S&P 500 Reach New Record Highs Amid Modest Strength On Wall Street

Stocks have moved modestly higher in morning trading on Friday, adding to the gains posted over the past several sessions. With the continued advance, the Nasdaq and the S&P 500 have reached new record intraday highs.

Currently, the major averages are off their highs of the session but still in positive territory. The Dow is up 93.44 points or 0.3 percent at 31,149.30, the Nasdaq is up 18.66 points or 0.1 percent at 13,796.40 and the S&P 500 is up 10.21 points or 0.3 percent at 3,881.95.

The continued strength on Wall Street comes after the Labor Department report released a closely watched report showing a modest rebound in employment in the month of January.

The report said non-farm payroll employment edged up by 49,000 jobs in January after plunging by a revised 227,000 jobs in December.

Economists had expected employment to rise by about 50,000 jobs following the loss of 140,000 jobs originally reported for the previous month.

Traders may see the uptick in employment as a goldilocks situation, as the modest increase offsets concerns of a prolonged slump but also suggests the economy could benefit from more fiscal stimulus.

The Labor Department also said the unemployment rate slid to 6.3 percent in January from 6.7 percent in December. The unemployment rate was expected to come in unchanged.

The unexpected drop in the unemployment rate came as household employment rose by a solid 381,000 persons compared with a 206,000-person decrease in the size of labor force.

Despite the decrease, Andrew Hunter, Senior US Economist at Capital Economics, said the relatively high unemployment rate “suggests there is still some way to go in the labor market recovery.”

“But, as the vaccine rollout allows the economy to reopen and demand is given an additional lift from continued fiscal support, we expect the unemployment rate to reach 4.5% by the end of this year,” Hunter said.

The markets also continue to benefit from upbeat news on the earnings front, with Ford (F), Estée Lauder (EL), Activision Blizzard (ATVI) and Gilead Sciences (GILD) moving higher after reporting their quarterly results.

Buying interest was also generated in reaction to news that Johnson & Johnson (JNJ) has applied for an emergency use authorization from the FDA for its single-dose coronavirus vaccine.

Networking stocks have shown a strong move to the upside in morning trading, driving the NYSE Arca Networking Index up by 2.1 percent to a record intraday high.

ViaSat (VSAT) and Ubiquiti (UI) are posting standout gains on the day, surging up by 11 percent and 10 percent, respectively.

Considerable strength has also emerged among oil service stocks, as reflected by the 1.6 percent gain being posted by the Philadelphia Oil Service Index.

The strength among oil service stocks comes amid a continued increase by the price of crude oil, with crude for March delivery climbing $0.74 to $56.97 a barrel.

Chemical and steel stocks are also seeing notable strength in morning trading, while most of the other major sectors are showing more modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index spiked by 1.5 percent, while Hong Kong’s Hang Seng Index climbed by 0.6 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index is up by 0.8 percent, the German DAX Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.3 percent.

In the bond market, treasuries are nearly unchanged after seeing considerable volatility in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by les than a basis point at 1.143 percent.

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