US STOCKS-S&P 500, Nasdaq set to wrap up best week since U.S. elections

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* 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 and S&P 0.35%, Nasdaq 0.25%

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By Medha Singh and Devik Jain
Feb 5 (Reuters) - U.S. stocks rose on Friday with the S&P
500 and the Nasdaq 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 .SPX and the Nasdaq .IXIC on track for
their best week 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. 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. "Today's payrolls number gives further momentum behind a
large stimulus package ... on top of that you have equity
earnings which continue to get revised up for the fourth
quarter," said Jon Adams, senior investment strategist and
portfolio manager at BMO Global Asset Management in Chicago.
Adams said the asset manager was "overweight" on equities,
with a bias toward U.S. small-caps and emerging market stocks.
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, jumped 1%.
The tech sector .SPLRCT slipped 0.4% after hitting a
record high earlier in the session.
At 11:34 a.m. ET the Dow Jones Industrial Average .DJI
rose 107.23 points, or 0.35%, to 31,164.21, the S&P 500 .SPX
gained 13.55 points, or 0.35%, to 3,885.29 and the Nasdaq
Composite .IXIC gained 34.08 points, or 0.25%, to 13,812.88.
Johnson & Johnson JNJ.N rose 1.6% 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, caught in the recent social media-hyped
trading frenzy, jumped about 30% again 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. 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 of 2.4%
for the quarter instead of a decline as initially expected.
Activision Blizzard Inc ATVI.O jumped about 9.2% 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. 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 1.8%, extending losses from
the previous session's 12% plunge.
Advancing issues outnumbered decliners by a 2.7-to-1 ratio
on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.
The S&P 500 posted 32 new 52-week highs and no new low,
while the Nasdaq recorded 389 new highs and 16 new lows.