US STOCKS-S&P 500, Nasdaq post biggest weekly gains since early November

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* J&J files COVID-19 vaccine application with the FDA
* Nonfarm payrolls increase by 49,000 in January
* Indexes: Dow up 0.3%, S&P 500 up 0.4%, Nasdaq up 0.6%

(Updates close with volume, Russell 2000 index gains for week)
By Caroline Valetkevitch
Feb 5 (Reuters) - U.S. stocks extended their recent rally on
Friday and the S&P 500 and Nasdaq indexes scored their biggest
weekly percentage gains since the U.S. elections in early
November, boosted by optimism over earnings, stimulus talks and
progress on vaccine rollouts.
Both the Dow Jones industrial average and S&P 500 rose for a
fifth straight session in their longest streak of gains since
August, while the S&P 500 and Nasdaq posted record closing highs
for a second day in a row.
A smaller-than-expected rebound in the U.S. labor market
last month highlighted the need for more government aid to shore
up the economy. The Labor Department on Friday reported a 49,000
increase in nonfarm payrolls last month, but job losses in
manufacturing and construction. U.S. President Joe Biden and his Democratic allies in
Congress moved ahead with their $1.9 trillion COVID-19 relief
package as lawmakers approved a budget plan that will allow them
to muscle Biden's plan through in the coming weeks without
Republican support. "The upcoming package of stimulus is going to be big," said
Alan Lancz, president of Alan B. Lancz & Associates Inc, an
investment advisory firm based in Toledo.
"You have a situation where there's a lot of cash on
sidelines and bonds have really underperformed, so that's helped
some sectors that have really done poorly."
Upbeat earnings this week have also supported investor
optimism. So far, stronger-than-expected corporate results in
the fourth quarter have driven up analysts' expectations, and
S&P 500 companies are on track to post earnings growth for the
period instead of a decline as initially expected.
The Dow Jones Industrial Average .DJI rose 92.38 points,
or 0.3%, to 31,148.24, the S&P 500 .SPX gained 15.09 points,
or 0.39%, at 3,886.83 and the Nasdaq Composite .IXIC added
78.55 points, or 0.57%, at 13,856.30.
For the week, the S&P 500 gained 4.65%, the Nasdaq added
6.01% and the Dow increased 3.89%. The small-cap Russell 2000
index .RUT rose 7.7% for the week, its biggest weekly
percentage gain since the week ended June 5.
The Cboe Volatility index .VIX fell and had its biggest
weekly point drop since the week ended Nov. 6.
The S&P 500 technology index .SPLRCT ended down 0.2% after
hitting a record high earlier in the session.
Johnson & Johnson JNJ.N rose 1.5% after the drugmaker said
it had asked U.S. health regulators to authorize its single-dose
COVID-19 vaccine for emergency use. Shares of GameStop Corp GME.N , caught in the recent social
media-hyped trading frenzy, rose 19.2% on Friday, after online
broker Robinhood lifted all the buying curbs imposed at the
height of the battle between amateur investors and Wall Street
hedge funds. Clover Health Investments Corp CLOV.O shares ended up
5.7%. It said it would cooperate with a request from the U.S.
Securities and Exchange Commission. U.S. regulators are
following up on a report about Clover by short-selling
specialist Hindenburg Research. Advancing issues outnumbered declining ones on the NYSE by a
2.33-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favored advancers.
The S&P 500 posted 34 new 52-week highs and no new lows; the
Nasdaq Composite recorded 286 new highs and four new lows.
Volume on U.S. exchanges was 13.65 billion shares, compared
with the 15.5 billion average for the full session over the last
20 trading days.