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US STOCKS-S&P 500, Nasdaq set for record 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

* Pinterest jumps as results top estimates

* Futures up: Dow 0.39%, S&P 0.40%, Nasdaq 0.33% (Adds comment, details; updates prices)

Feb 5 (Reuters) - The S&P 500 and the Nasdaq were on track to open at 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 early on Friday as the U.S. Senate narrowly approved a budget plan allowing the passage of the legislation in coming weeks with or 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.”

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 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 shares, which have shed more than 80% of their value this week, were up 8% at $58 in premarket trading.

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 8:35 a.m. EST, Dow E-minis were up 121 points, or 0.39% and S&P 500 E-minis were up 15.5 points, or 0.4%. Nasdaq 100 E-minis were up 44.5 points, or 0.33%.

Futures tracking the domestically focused Russell 2000 gained 0.7%.

Johnson & Johnson rose 2% after the drugmaker said it had asked U.S. health regulators to authorize its single-dose COVID-19 vaccine for emergency use, and it would apply to European authorities in the coming weeks.

Chamath Palihapitiya-backed Clover Health Investments Corp 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 rose 3.4% after plunging about 12% on Thursday.

Pinterest Inc jumped 10% after the image-sharing company reported better-than-expected quarterly results.

Snapchat owner Snap Inc dropped about 7.5% after it warned that upcoming privacy changes by Apple Inc could hurt its ad business. (Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel)

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