Stocks rally to new record highs on strong jobs data and Pfizer Covid pill news

Stocks rally to new record highs on strong jobs data and Pfizer Covid pill news
Richard Drew/AP

Wall Street got a double dose of good news to cheer on Friday. The job market rebounded sharply in October following a disappointing September. And Pfizer surged after issuing positive data about its Covid-19 pill.

The Dow soared about 300 points, or 0.8%, in early trading to hit a new record high. The Nasdaq and S&P 500 were up 0.6% and 0.7% respectively and also reached new all-time high levels. The S&P topped the 4,700 mark while the Nasdaq passed the 16,000 milestone.

The Dow is now up 1.8% for the week while the S&P 500 and Nasdaq have gained 2.5% and 3.5% respectively over the past five days. The S&P 500 has now rallied for the past seven days while the Nasdaq is on a 10-day winning streak. Both indexes are up about 25% so far this year.

The CNN Business Fear & Greed Index, which measures seven gauges of investor sentiment, pushed even further into “Extreme Greed territory. It was showing levels of investor Fear just a month ago.

Investors cheered the fact that 531,000 jobs were added in October alone. Previous jobs gains for August and September were also revised higher.

“This was certainly robust. Investors are optimistic that we will get continued strong and even stronger numbers,” said Julian Brigden, co-founder and president of MI2 Partners.

Brigden cautioned, however, that the labor data may make the Federal Reserve consider accelerating plans to start raising interest rates next year, especially if wages, which rose 4.9% over the past 12 months, spark more concerns about inflation.

“This does raise questions about how long the Fed can hold the line,” he said, adding that there is real risk that the central bank may suddenly become more concerned about inflation. “The market may have to factor in more rate hikes.”

Still, any concerns about rate increases in 2022 were overshadowed Friday by more encouraging developments about the global fight against Covid-19.

Pfizer’s good news about its experimental Covid pill, which the Big Pharma company said helped reduce the risk of hospitalization and death from coronavirus, also helped lift market sentiment. Shares of Pfizer surged nearly 10% Friday.

“We’re continuing to get through Covid and getting back to work,” said Sam Solem, portfolio manager at Intrepid Private Wealth, who owns shares of Covid vaccine maker AstraZeneca.

“Vaccines are a key part of the solution but there has been some vaccine hesitancy,” Solem added. “So having other therapeutics are just as important. Life can return to normal and people can go out to eat, go to gyms and head back to the office.”

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