/Dow industrials climb nearly 300 points as Cisco, Disney shares rally; Nasdaq heads for weekly loss – MarketWatch

Dow industrials climb nearly 300 points as Cisco, Disney shares rally; Nasdaq heads for weekly loss – MarketWatch


Stock indexes were seeing solid gains midday Friday, as investors looked to end a week on Wall Street that has been mostly framed by optimism over the prospects of vaccines and treatments for COVID-19, while overshadowing a spike in the viral outbreak in the U.S. and Europe.

Markets remain sensitive to talk of the possibility of another fiscal aid package that could help workers and businesses, despite a lack of political momentum to achieve a pact in the aftermath of a contentious U.S. presidential election.

How are stock benchmarks performing?

The Dow Jones Industrial Average
DJIA,
+1.17%

traded up 282 points, or 1%, to reach around 29,359, not far from its Feb. 12 closing record at 29,551.42.

Mean while, the S&P 500 index
SPX,
+0.97%

gained 33 points to reach 3,569, for a gain of 0.9%, just shy of its Sept. 2 record high at 3,580.84; while the Nasdaq Composite Index
COMP,
+0.45%

NQZ20,
+0.46%

climbed 74 points, a gain of 0.5%, at about 11,785.

For the week thus far, the Dow is up 3.7%, the S&P 500 index is looking at a 1.7% gain, while the Nasdaq Composite Index
COMP,
+0.45%

is on track for a weekly decline of 1%.

What’s driving the stock market?

U.S. stock indexes on Friday the 13th were set to rise despite a number of factors that should otherwise spook investors.

Hope for COVID-19 vaccines has pushed most of the equity benchmarks to a likely second straight weekly gain, but questions remain about the outlook as parts of the world face fresh lockdowns to address a new spread of the virus.

“For all the optimism about the delivery of a successful vaccine, the reality is that the announcement of a possible candidate was never likely to be able to put a stop to what is currently playing out across Europe, as well as the US, in terms of a sharp rise in coronavirus infection rates, hospitalizations, and ultimately, a sharp rise in mortality rates,” wrote Michael Hewson, chief market analyst at CMC Markets UK in a note.

Read: The market is now more vulnerable to bad news, says this strategist. Here’s what he says comes next

The U.S. set a record on Thursday for coronavirus hospitalizations of more than 67,000 as well as a record one-day coronavirus case tally of 163,405. The spread of the pathogen in New York City meant the daily case and positivity rate was 2.6%–and Mayor de Blasio reiterated on Thursday that he would close schools if it hits 3%.

Earlier in the week the promise of an effective Pfizer
PFE,
+1.77%

and BioNTech
BNTX,
+3.97%

vaccine prompted investors to abandon technology stocks that benefit from the stay-at-home trend in favor of value-oriented plays that may benefit from economic recovery, but the latter part of the week has seen a resurgence of bets that have been considered winners during the pandemic.

Federal Reserve Chairman Jerome Powell, during a webcast panel event with central bankers on Thursday, cautioned investors not to overplay reports of vaccines. “From our standpoint, it’s just too soon to assess with any confidence the implications of the news for the path of the economy, especially in the near term,” he said.

“The next few months could be challenging,” Powell said in the event that included European Central Bank President Christine Lagarde and Bank of England Gov. Andrew Bailey.

Meanwhile, the market is growing doubtful that another coronavirus aid package can be crafted soon by Congress, with a gulf remaining between Republicans and Democrats over the breadth and scale of a relief package to help out-of-work Americans and troubled businesses.

Through all the headwinds, many investors remain upbeat based on continued monetary support from the Fed, which promises accommodative policies for the foreseeable future. Investors also seem hopeful that the U.S. and other parts of the world are better prepared for the next wave of the coronavirus pandemic.

In a speech to the Economic Club of Memphis, St. Louis Fed President James Bullard said Friday that the U.S. labor market improved at a rapid pace this year compared with the aftermath of the 2008-2009 financial crisis. “Basically unemployment has come down from the peak very fast, I’m not sure you can really absorb how shocking this is,” he said.

He did also say that the U.S. needs to be more mindful of not letting the new wave of COVID-19 hobble the nascent recovery.

Meanwhile, better-than-expected results from the likes of Walt Disney Co.
DIS,
+1.92%

and Cisco Systems
CSCO,
+7.04%

also helped boost the buying mood on Wall Street on Friday. Also, Post-it maker and diversified industrial company 3M Co.
MMM,
+1.53%

 said Friday sales rose 3% in October to $2.9 billion.

Investors are still keeping an eye on Joe Biden’s transition to the White House after he has been projected the winner of the 2020 U.S. presidential election against incumbent Donald Trump.

In economic reports, the producer-price index advanced 0.3% last month, the government said Friday. It has risen six months in a row since the economy reopened in May. Wholesale inflation more broadly was largely muted, however. The increase in producer prices over the past 12 months edged up to 0.5% from 0.4%.

Separately, a report on consumer sentiment from the University of Michigan revealed worries bubbling up about the coronavirus resurgence, U.S. falling to 77 in November from a previous reading of 81.8.

Which stocks are in focus?
  • Cisco Systems Inc. shares surge 6.9% after the maker of network services, videoconferencing tools and security software’s quarterly results and outlook topped Wall Street estimates, and it announced a new chief financial officer.
  • Disney wrapped up its fiscal year with another quarterly loss, resulting in the entertainment giant’s first annual loss in more than 40 years, but a better-than-expected performance in the quarter pushed shares higher in extended trading Thursday. Shares gained 2%.
  • JetBlue Airways Corp.
    JBLU,
    +5.26%

     provided details of its plans to limit onboard capacity for the busy holiday season and its plans to open all of its seats, saying the decision was supported by “science validating the safety of the aircraft cabin.” Shares rose 5.2% early Friday.
  • Shares of Li Auto Inc.
    LI,
    +0.72%

    were up 1.8% after the China-based electric vehicle maker reported its first quarterly results since going public, in which it reported a wider-than-expected net loss while revenue that beat forecasts, as deliveries continued to rise.
  • Shares of Spectrum Brands Holdings Inc.
    SPB,
    +3.16%

    rose 2.2% Friday, after the home, pet and garden care products company reported fiscal fourth-quarter profit and sales that rose above expectations, citing elevated demand and strong point-of-sale amid a “quick recovery” from COVID-19-related supply disruptions.
  • Shares of DraftKings
    DKNG,
    +4.57%

    rose 3.7% to above $42 after the company beat revenue and earnings estimates. The gambling site lost 57 cents a share, narrower than expectations for a loss of 63 cents. Revenue was $132.8 million, beating estimates of $131.6 million.
  • DoorDash filed for a public stock offering on Friday. The food delivery company will list on the New York Stock Exchange under the ticker DASH.
How are other assets trading?

The yield on the 10-year U.S. Treasury note
TMUBMUSD10Y,
0.895%

 was little-changed at 0.89% on Friday. Yields and bond prices move in opposite directions.

The pan-European Stoxx 600 Europe Index
SXXP,
+0.00%

ended virtually unchanged on Friday at 385.18 and London’s FTSE 100
UKX,
-0.35%

 closed 0.4% lower.

Oil futures fell, with the U.S. benchmark
CL.1,
-2.09%
,
losing 71 cents, or 1.7% to reach $40.42 per barrel, but were headed for a 9% weekly gain. Gold prices
GCZ20,
+0.63%

traded higher, with the December contract climbing by $18.90, or 1%, to trade at $1,892.20 an ounce, but headed for its biggest weekly loss since September.

The ICE U.S. Dollar Index
DXY,
-0.19%
,
a measure of the currency against a basket of six major rivals, was down 0.2% at 92.782.

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