S&P 500 and Nasdaq notch highest closes since early 2022

All indexes were up in the morning, the Dow up some 120, then crashed back to break-even from 11 a.m. until noon before they all started climbing again to end the week with another consecutive gain, the sixth for both the Dow and S&P, their longest streaks in four years. The good news was the payrolls report showing 19,000 more new jobs than predicted, once again offering assurance that the economy is showing resilience in the face of the rate cuts and that any recession would have a soft landing. 

The unemployment rate fell to 3.7% offering further confidence, reflected in the consumer sentiment data snapping up after four straight months of declines. The no more hikes scenario remains in place though the oddsmakers are now reevaluating the first rate cut coming in May instead of March. At 11.0 billion, volume is right in line with recent averages. The chart below also shows that payroll growth has now reached pre-pandemic levels which is more good news on the anti-inflation, anti-recession, anti-rate hike fronts. 

S&P 500 and Nasdaq notch highest closes since early 2022

By Noel Randewich and Amruta Khandekar

Fri December 8, 2023 5:31 PMPrivate sector job gains were

DJ: 36,117.38  +62.95         NAS: 14,339.99  +193.28       S&P: 4,585.59  +36.25     12/7

DJ: 36,247.87  +130.49       NAS: 14,403.97  +63.98         S&P: 4,604.37  +18.78     12/8

Dec 8 (Reuters) - U.S. stocks closed higher on Friday, with the S&P 500 and Nasdaq notching their highest closing levels since early 2022 after a robust U.S. jobs report fueled investor optimism about a soft landing for the economy.  Investors pared bets that the Federal Reserve will cut interest rates in March after a Labor Department report showed nonfarm payrolls increased by 199,000 jobs in November, compared with an estimated increase of 180,000. 

The unemployment rate slipped to 3.7%, while average earnings edged up to 0.4% on a monthly basis, compared with forecasts of 0.3% growth.  Interest rate futures show traders widely expect the Federal Reserve to hold interest rates steady at its meeting next week, according to the CME FedWatch tool. However, futures prices now imply traders mostly expect the Fed to start cutting rates in May, two months later than the March meeting many investors had been betting on in recent days.  "The drop in the unemployment rate in particular will assuage any concerns of a recession, and with payrolls and earnings both rising, it keeps the ‘soft landing’ narrative very much in the ascendancy," said Stuart Cole, head macro economist at Equiti Capital in London.  "The report will likely see some of those forecasting an early Fed cut next year re-evaluating their positions," Cole said.

The S&P 500 climbed 18.78 to end the session at 4,604.37 points.  The Nasdaq gained 63.98 to 14,403.97 points, while Dow Jones Industrial Average rose 130.49 to 36,247.87 points.  The S&P 500's close was its highest since March 2022, while the Nasdaq's close was it highest since April 2022.  For the week, the S&P 500 rose 0.21%, the sixth time in a row it has logged a weekly gain, its longest streak since November 2019.  The Dow edged up 0.01% for the week, also its sixth straight weekly gain, its longest run of positive weeks since February 2019.  The Nasdaq gained 0.69% for the week.  The S&P 500 remains down 4% from its record high close in late 2021 with the Nasdaq still down 10% from its record high then.

Chipmaker Nvidia (NVDA.O) and Facebook-owner Meta Platforms (META.O) each gained nearly 2% in Friday's session.  Shares of Google-parent Alphabet (GOOGL.O) dipped 1.4%, giving up gains after an AI-led rally in the previous session.  Other data showed U.S. consumer sentiment perked up much more than expected in December, snapping four straight months of declines.  Robust quarterly reports and optimism that the Fed has finished raising rates have fueled steady gains in the U.S. stock market since late October. 

Honeywell (HON.O) dipped 1.6% after the industrial firm said it would buy air conditioner maker Carrier Global's (CARR.N) security business for $4.95 billion. Carrier's shares rose almost 4%.  Paramount Global (PARA.O) soared 12% after reports of takeover interest in the media company. Peer Warner Bros Discovery (WBD.O) jumped 6.6%.  DocuSign (DOCU.O) rallied 4.8% after the e-signature product provider raised its annual forecast for revenue. 

Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) by a 1.5-to-one ratio.  The S&P 500 posted 33 new highs and no new lows; the Nasdaq recorded 104 new highs and 90 new lows.

Volume on U.S. exchanges was 11.0 billion shares traded, in line with the previous 20 sessions.