US STOCKS-S&P 500, Nasdaq scale new highs on stimulus progress, job market rebound

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* J&J files COVID-19 vaccine application with the FDA
* Nonfarm payrolls increase by 49,000 in January
* Activision jumps as revenue forecast ahead of estimates
* Indexes up: Dow 0.48%, S&P 0.37%, Nasdaq 0.11%

(Updates to market open)
By Medha Singh and Devik Jain
Feb 5 (Reuters) - The S&P 500 and the Nasdaq hit record
highs on Friday on signs of progress towards more economic
stimulus, while a closely watched jobs report confirmed the
labor market was stabilizing.
Still, U.S. employment growth rebounded less than expected
in January and job losses in December were deeper than initially
thought, strengthening the argument for additional relief money
to aid the recovery from the COVID-19 pandemic. President Joe Biden's drive to enact a $1.9 trillion
coronavirus aid bill gained momentum on Friday with the U.S.
House of Representatives set to vote on a budget plan that would
allow the passage of the legislation in coming weeks without
Republican support. "The market has priced in this Goldilocks scenario that
we're going to get past COVID and we're all going to go back to
normal," said Dennis Dick, proprietary trader at Bright Trading
LLC in Las Vegas.
"It's just a matter of how quickly that recovery comes."
Economy-linked materials .SPLRCM and energy .SPNY led
gains among major S&P sectors. The small-cap Russell 2000 index
.RUT , sensitive to the domestic economic outlook, gained 0.8%.
Johnson & Johnson JNJ.N rose 2% after the drugmaker said
it had asked U.S. health regulators to authorize its single-dose
COVID-19 vaccine for emergency use. Stimulus talks, upbeat earnings and progress in vaccine
rollouts have bolstered bets of a speedy economic recovery,
setting the S&P 500 .SPX and the Nasdaq .IXIC on track for
their best weeks since the U.S. election in early November.
A retail trading frenzy also appeared to fade after upending
markets last week. Videogame retailer GameStop Corp's GME.N
shares, which have shed more than 80% of their value this week,
were up 1% at $60.77.
Stronger-than-expected corporate results so far in the
fourth quarter have driven up analysts' expectations, and S&P
500 companies are now on track to post earnings growth for the
quarter instead of a decline as initially expected. At 9:40 a.m. ET, the Dow Jones Industrial Average .DJI
rose 148.87 points, or 0.48%, to 31,204.73, the S&P 500 .SPX
gained 14.20 points, or 0.37%, to 3,885.94 and the Nasdaq
Composite .IXIC increased 15.83 points, or 0.11%, to
13,793.57.
Chamath Palihapitiya-backed Clover Health Investments Corp
CLOV.O said it had received a letter from the U.S. Securities
and Exchange Commission following a critical report published by
noted short-selling specialist Hindenburg Research. Clover's shares dropped about 3%, extending losses from the
previous session's 12% plunge.
Activision Blizzard Inc ATVI.O jumped about 12% after the
company forecast full-year adjusted revenue above analysts'
estimates, driven by strong demand for the latest installment of
its blockbuster "Call of Duty" franchise. Advancing issues outnumbered decliners by a 3.3-to-1 ratio
on the NYSE and by a 2.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 25 new 52-week highs and no new low,
while the Nasdaq recorded 242 new highs and three new lows.