NEW YORK -- U.S. stocks pushed further into record heights on Friday following an encouraging report on hiring across the country, though trading was shaky as the bond market was hit with another day of sharp swings.
The S&P 500 rose 17.47, or 0.4%, to 4,697.53 and clinched an all-time high for the seventh straight day. The Dow Jones Industrial Average gained 203.72, or 0.6%, to 36,327.95, and the Nasdaq composite added 31.28, or 0.2%, to 15,971.59.
The 10-year yield, which tends to move with expectations for the economy and inflation, dropped to 1.45% and is near its lowest level since September. It was at 1.58% just two days earlier. Analysts had varying explanations for that and other sharp moves in the bond market, which some called counterintuitive.
The Dow and Nasdaq nevertheless still joined the S&P 500 in setting all-time highs. The smaller stocks in the Russell 2000 performed even better, jumping 1.4%
An encouraging report from Pfizer helped to lift the market, particularly companies that most need daily life to return to normal from the pandemic. Pfizer rose 10.9% after it said its experimental pill sharply cut rates of hospitalization and death for COVID-19 patients. Airlines, casinos, cruise lines and live-event companies had similar jumps.
The headline report of the day was the one from the Labor Department that showed employers hired a net 531,000 workers in October. That was more than 100,000 above economists' expectations. The gains were widespread across industries, and the government also revised higher the numbers for job growth in earlier months.
One potential worry spot for markets was a big jump in workers' wages, up 4.9% from a year earlier, which can feed into concerns about inflation. But the numbers were relatively in line with economists' expectations.
“It was one of those Goldilocks reports,” said Nate Thooft, head of global asset allocation at Manulife Investment Management. Besides showing stronger-than-expected hiring, “the simple reality was it wasn’t showing any overheating either.”
That's why it was surprising that the 10-year Treasury yield fell so sharply to 1.44% from 1.52% late Thursday.
One possible reason was that investors see more people heading back to work as helping to clear the supply-chain bottlenecks that have hit the economy and driven up inflation, said Brian Jacobsen, senior investment strategist at Allspring Global Investments. That could lead to lowered expectations for inflation, which would add downward pressure on Treasury yields.
“The more people we get back to fill open positions will help keep that shortage pressure at bay a little bit,” said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management Co.
But the degree of moves in the bond market still took market watchers by surprise.
“Some of these moves look extreme to me,” Allspring Global Investment's Jacobsen acknowledged, citing a sharp drop for the 30-year Treasury yield to 1.88% from 1.96%. “I don’t think we can justify where yields are. It leads me to believe that this is some rather rapid repositioning by traders in the market and not necessarily a change in the trend.”
A day earlier, bond markets around the world shook after the Bank of England decided not to raise interest rates. Many investors had thought it was nearly a sure thing, and the inaction sent yields sliding.
For stocks, the trend has been solidly upward recently as a parade of companies has reported stronger profit for the summer than analysts expected. More than four out of five companies in the S&P 500 have topped forecasts, with roughly 90% of reports in hand, according to FactSet. Companies in the index appear on track to report 39% growth in their quarterly earnings per share over year-ago levels, which would be the third-fastest since 2010.
Online travel company Expedia jumped 15.6% and home-sharing company Airbnb rose 13% after they each reported stronger profits than expected.
On the losing end was exercise equipment maker Peloton Interactive. It plunged 35.3% after turning in profit and revenue that fell short of Wall Street's expectations.
Health care stocks were also lagging the market. Moderna slumped 16.6% as it continued to fall after cutting its forecast on Thursday for vaccine deliveries in 2021.