US STOCKS-S&P 500, Nasdaq set to register best week since November

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* J&J files COVID-19 vaccine application with the FDA
* Nonfarm payrolls increase by 49,000 in January
* Indexes up: Dow 0.3%, S&P 500 0.4%, Nasdaq 0.5%

(Updates to afternoon trading)
By Caroline Valetkevitch
Feb 5 (Reuters) - U.S. stocks rose on Friday with the S&P
500 .SPX and the Nasdaq Composite index .IXIC hitting record
highs as a smaller-than-expected rebound in the labor market
last month highlighted the need for more government aid to shore
up the economy.
Stimulus talks, upbeat earnings and progress in vaccine
rollouts have bolstered bets of a speedy economic recovery,
setting the S&P 500 and the Nasdaq on track for their biggest
weekly percentage gains since the U.S. elections in early
November.
The Labor Department's data showed job losses in
manufacturing and construction, the two sectors that have been
propping up the economy. Job losses in December were also deeper
than initially thought. U.S. 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 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."
The Dow Jones Industrial Average .DJI rose 85.2 points, or
0.27%, to 31,141.06, the S&P 500 .SPX gained 14.66 points, or
0.38%, to 3,886.4 and the Nasdaq Composite .IXIC added 71.41
points, or 0.52%, at 13,849.15.
The S&P 500 technology sector .SPLRCT slipped after
hitting a record high earlier in the session.
Johnson & Johnson JNJ.N rose 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, was higher 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. 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.
Advancing issues outnumbered declining ones on the NYSE by a
2.46-to-1 ratio; on Nasdaq, a 1.78-to-1 ratio favored advancers.
The S&P 500 posted 33 new 52-week highs and no new lows; the
Nasdaq Composite recorded 267 new highs and four new lows.