Wall Street with record gains

Major indices ended the week at a record high on Friday after a better-than-expected monthly job report and positive news about Covid-19 treatment on Wall Street sparked a sea of ​​green.

The S&P 500 rose 0.47% to end the day with a closing record of 4,697.53. The Dow Jones Industrial Average rose 0.57% or 204 points to hit a daily record of 36,328.31 points. The Nasdaq gained 0.2% and closed with a record of 15,971.59 points. The Russell 2000 Futures also achieved a record close in small caps.

The US economy created 531,000 new jobs in October, surpassing projections of 450,000, while the unemployment rate fell from 4.8% to 4.6%.

Average hourly wages rose 4.9% year over year in October and 0.4% year over year as companies continue to raise wages and competition for workers, particularly in the leisure and hospitality sectors, remains intense. The increase in hourly wages slowed from the monthly increase of 0.6% in September.

However, the continued rise in wages makes the Federal Reserve vulnerable to a lag in inflation, which increases the risk that the central bank may be forced to hike rates sooner.

"People will feel the pressure of rising prices and that will translate into more pressure on organizations to raise wages and that is now reflected in the numbers," said Johan Grahn, Head of ETF Strategy Allianz (DE: ALVG), in an interview on Thursday before the labor market report. "Here I see the risk that the Fed might underestimate the impact of rising wages on inflation."

In the fight against Covid, Pfizer (NYSE: PFE) said its experimental pill used to treat Covid-19 reduced the risk of hospitalization and death by nearly 90%. Pfizer's share price jumped more than 10%, and the drug company plans to apply for approval for its pill as soon as possible.

The positive news about the vaccine fueled reopening trading - bullish bets on stocks tied to progress in the economic reopening - and resulted in a jump in consumer discretionary amid rising travel and hospitality stocks.

Expedia (NASDAQ: EXPE) Group, Royal Caribbean Cruises (NYSE: RCL) and Penn National Gaming (NASDAQ: PENN) led the rising stocks in the sector.

Stocks of stay-at-home companies like Zoom Video Communications (NASDAQ: ZM), Teladoc (NYSE: TDOC) Health, and Peloton (NASDAQ: PTON) slumped on the news, with the latter trading lower after disappointing quarterly earnings.

Communications services, meanwhile, were boosted by a 16% increase in Live Nation Entertainment (NYSE: LYV) after the event organizer posted a profit in the third quarter as the return of live events fueled growth.

Energy stocks bounced back from their weakness the previous day as oil prices climbed again after OPEC and its allied producers decided to hold production steady despite US demands to increase production.

The big tech stocks were able to extend their gains from the beginning of the week, with Apple (NASDAQ: AAPL), Amazon.com (NASDAQ: AMZN), Meta Platforms (NASDAQ: FB) and Alphabet (NASDAQ: GoogL) all in the green. Microsoft (NASDAQ: MSFT) was the exception, closing just below the flatline.

In Washington, the House of Representatives is expected to postpone the vote on President Joe Biden's $ 1.75 trillion economic plan over questions about its cost.

Among the indexes that hit new highs this week, perhaps the most notable was the Russell 2000 record high, reflecting optimistic investor sentiment about risk assets.

"In the past six months the market has risen, but the small and mid caps haven't really participated," said David Keller, chief market strategist at StockCharts, in an interview with Investing.com on Friday.

In the past few weeks, however, that has changed: "Small caps are on the rise and the Russell 2000 is breaking out of its six-month low, which shows that investors are optimistic and are taking risks again," continued Keller. "That tends to lead to higher prices".