Market Snapshot: Dow slightly lower after jobs data as U.S. election count continues

The Dow on Thursday rose 542.52 points, or 2%, to finish at 28,390.18, while the S&P 500 advanced 67.01 points, or 2%, to close at 3,510.45. The Nasdaq Composite surged 300.15 points, or 2.6%, to end at 11,890.93. Through Thursday, the S&P 500 and Dow were each up more than 7% for the week, while the Nasdaq was up nearly 9%.

What’s driving the market?

Stocks were in danger of ending a four-day winning streak that saw equities extend gains in the wake of Tuesday’s U.S. elections, with the continuing vote tally showing Democratic challenger Joe Biden closing in on the 270 electoral college votes needed to defeat President Donald Trump.

Biden moved ahead of Trump in vote counts in Georgia and Pennsylvania early Friday.

The election week rally was attributed in part to expectations for a Biden win coupled with diminishing chances of a Democratic takeover of the Senate, which would make it difficult to repeal the 2017 corporate income tax cut or raise other taxes.

“At least the market has a narrative: A Democrat President who doesn’t control the Senate, will be less combative on trade, but will be more limited where fiscal policy is concerned,” said Kit Juckes, macro strategist at Société Générale, in a note.

“This leaves a bigger role for the Federal Reserve, which means even lower rates for longer, even more QE for longer,” he wrote. “So the dollar is weaker, spreads are tight, equities have rallied around the world this week and volatility is (even) lower than it was.”

Control of the Senate, however, might not be clear until January, with a pair of races in Georgia potentially headed to runoffs.

While the drama around the U.S. election has been in focus all week, the Labor Department on Friday said the U.S. economy added 638,000 jobs in October, topping expectations for a gain of 503,000 but a slowdown from the pace seen since the labor market began to recover from the COVID-19 pandemic in May. The jobless rate dropped to 6.9% from 7.9%.

“The continuing Improvement in labor market conditions is unambiguous, but so is the slowdown in the pace of gains,” said Jim Baird, chief investment officer of Plante Moran Financial Advisors. “The wild card in the outlook is the risk presented by the resurgence in COVID-19 and the path forward for additional fiscal stimulus to help bridge the gap for sidelined American workers.”

Meanwhile, the continued rise in COVID-19 infections threatens to squelch the economic rebound. The U.S. on Thursday saw new cases top 100,000 for a second day in a row, marking consecutive records.

Which companies are in focus?

• Shares of Uber Technologies Inc. UBER, +6.17% were little changed after the ride-hailing company, fresh off its election victory to avoid classifying drivers as workers in California, reported results that showed its business continues to recover from the pandemic.
• Peloton Interactive Inc. PTON, +4.39% shares were down 2% after the interactive exercise-equipment company said sales continued to surge as a result of the pandemic but warned that it continues to struggle with supply issues that make it difficult to keep up with demand.
• Shares of CVS Health Corp. CVS, +5.50% were up more than 3% after the drugstore chain beat estimates for the third quarter and raised its full-year guidance, buoyed by strong demand for coronavirus testing.
• Shares of Hershey Co. HSY, +2.62% were up 2.4% after the chocolate and confectionery products company delivered third-quarter profit and revenue that beat expectations, and provided an upbeat full-year outlook.
• ViacomCBS Inc. VIAC, -2.01% shares were down more than 4% after delivering results topped Wall Street expectations.
• Shares of Marriott International Inc. MAR, +2.57% were up 1.4% after the hotel operator reported a surprise third-quarter profit and revenue that fell a little less than forecast, while not providing financial guidance given “numerous uncertainties” associated with the COVID-19 pandemic.

What are other markets doing?

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.830% fell 4.5 basis points to 0.821%.

The pan-European Stoxx 600 Europe Index SXXP, +0.04% was little changed, while London’s FTSE 100 UKX, +0.46% rose 0.5%.

Oil futures were under pressure, with the U.S. benchmark CL.1, -2.57% down 1.9% near $ 38.05 a barrel. Gold futures GC00, -0.15% were up 0.4% near $ 1,955.30 an ounce.

The ICE U.S. Dollar Index DXY, -0.11%, a measure of the currency against a basket of six major rivals, was down 0.2%.