By Karen Langley and Caitlin Ostroff 

U.S. stock indexes climbed to records Friday as the revival of stimulus negotiations bolstered expectations that the economy can weather the pandemic's continued spread.

The S&P 500, Dow Jones Industrial Average, technology-heavy Nasdaq Composite and Russell 2000 small-cap index closed at new highs, the first time since January 2018 that all four indexes closed at records on the same day, according to Dow Jones Market Data.

The records capped a week of modest gains in the stock market, after indexes surged in November amid a drumbeat of promising reports on the effectiveness of Covid-19 vaccines. News that several vaccine candidates may be effective has raised hopes for recovery in industries damaged by the pandemic

"As grim as the pandemic news may be over the next three or four months, the vaccine at the end of the tunnel will probably mean that the markets overlook that grim news," said George Ball, chief executive of private investment firm Sanders Morris Harris.

The S&P 500 rose 1.7% for the week, while the Dow industrials added 1%. The Russell 2000's 2% weekly gain nearly matched the 2.1% rise in the Nasdaq Composite, an example of how economically-sensitive stocks have recently competed with the technology shares that dominated earlier in the year.

Investors watched closely in recent days as momentum grew in Washington for a new coronavirus aid package that could shore up the economic recovery. New data Friday showing a sharp decline in job growth in November added to the sense of urgency behind the negotiations, with members of both parties pointing to the jobs report as impetus for swift action.

"You are still looking at an economy that is in pain," said Amy Kong, chief investment officer at Barrett Asset Management. "You want to make sure that the household income is continuing on, or the momentum is there, because I believe once household income gets to a level where it impacts confidence, it's going to be hard to get folks to spend again."

U.S. consumers boosted spending in October for a sixth straight month, but recent survey data suggests their views of the economic outlook dimmed in November. Consumer spending accounts for more than two-thirds of U.S. economic activity.

The November jobs report showed employers added 245,000 jobs last month, less than half the 610,000 jobs added in October and below economists' expectations. The unemployment rate edged down to 6.7% from 6.9% in October, partly because fewer Americans were looking for work.

"The jobs report's important," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. "But it just kind of confirms what we're seeing, which is there's only so much recovery we're going to see until we can get the economy fully reopened."

Newly reported Covid-19 cases in the U.S. hit a record high Thursday, as did deaths reported in a day, as the global death toll from the coronavirus pandemic passed 1.5 million. Hospitalizations also hit a record, with 100,667 people in the U.S. admitted as of Thursday, according to the Covid Tracking Project.

Amid the bleak news, stocks rose Friday. The S&P 500 gained 32.40 points, or 0.9%, to 3699.12. The Dow Jones Industrial Average advanced 248.74 points, or 0.8%, to 30218.26. The Nasdaq Composite added 87.05 points, or 0.7%, to 12464.23.

Among individual stocks, shares of DocuSign gained $12.21, or 5.3%, to $243.22 after the company provided guidance that topped analysts' expectations. Ulta Beauty shares declined $9.99, or 3.5%, to $279.54 after its chief executive said the company is expecting fourth-quarter comparable-store sales to fall between 12% and 14%.

In bond markets, the yield on the 10-year U.S. Treasury note rose to 0.967%, from 0.919% on Thursday.

Brent crude, the global benchmark for oil markets, climbed 1.1% to $49.25 a barrel--its highest settle value since March--after OPEC and a group of Russia-led oil producers agreed to increase their collective output by 500,000 barrels a day next month.

The world's biggest producers are betting that the worst of a pandemic-inspired shock to demand is behind them after curtailed travel weighed heavily on oil prices this year.

Overseas, the pan-continental Stoxx Europe 600 rose 0.6%. Japan's Nikkei 225 declined 0.2%, while Hong Kong's Hang Seng Index gained 0.4%.

In Hong Kong, shares of China National Offshore Oil and Semiconductor Manufacturing International dropped over 2% after the U.S. Defense Department added the state oil giant and chip maker to a list of nearly three dozen companies the U.S. says helps the country's military.

The blacklist, which the U.S. launched last month, has hit stocks and bonds of the targeted Chinese companies. Index compilers FTSE Russell, JPMorgan and MSCI are rethinking their stance on these securities targeted by the U.S. government and have been collecting investor feedback.

Frances Yoon contributed to this article.

Write to Karen Langley at karen.langley@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

December 04, 2020 17:14 ET (22:14 GMT)