NEW YORK (AP) — Stocks pushed higher on Wall Street, leaving the market with its sixth weekly gain in a row. That’s the longest such winning streak in four years. The gains Friday came after a report showed the job market isn’t slowing as much as expected. The S&P 500, the Dow and the Nasdaq composite each gained 0.4%. Treasury yields rose more sharply following the report, which said U.S. employers added more jobs than economists expected last month. The strong data keep concerns about a recession at bay, but the worry is a strong economy could also give inflation more fuel.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Stocks are ticking higher Friday after a report showed the U.S. job market isn’t slowing as much as expected.
The S&P 500 was 0.4% higher in late trading and close to extending its weekly winning streak to six. The Dow Jones Industrial Average was up 142 points, or 0.4%, as of 3 p.m. Eastern time, and the Nasdaq composite was 0.5% higher.
Yields rose more sharply in the bond market following the report, which said U.S. employers added more jobs last month than economists expected. Workers’ wages also rose more than expected, and the unemployment rate unexpectedly improved.
The strong data keep at bay worries about a possible recession, at least for a while longer, and stocks of some companies whose profits are closely tied to the strength of the economy were rising. Energy-related stocks had the biggest gain out of the 11 sectors that make up the S&P 500, rising 1% as oil prices climbed amid hopes for more demand for fuel.
Carrier Global added 4.2% for one of the market’s bigger gains after it said it agreed to sell its security business, Global Access Solutions, to Honeywell for $4.95 billion.
But the worry on Wall Street is that the remarkably resilient job market could also end up giving inflation more fuel. That could push the Federal Reserve to either raise its main interest rate further or at least keep it at its highest level since 2001 for longer than expected.
That in turn could dilute the central hope that’s helped stocks rally recently to their best levels since March 2022: Inflation has come down enough from its peak two summers ago for the Fed to finally halt its hikes to interest rates and begin cutting them next year.
“The Fed is so afraid of ‘giving up before the job is done’ that it will err on the side of overdoing it,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Overall, the job data looked decent, Bank of America economists said in a BofA Global Research report. They said the numbers back up their expectation “that economic activity will slow, not crash.”
The yield on the 10-year Treasury rose to 4.25% from 4.15% late Thursday. It had been on a general decline and relaxing the pressure on stocks since topping 5% in October and reaching its highest level since 2007.
The yield on the two-year Treasury, which more closely follows expectations for the Fed, rose to 4.74% from 4.60% as traders pulled back on bets for how many times the Fed could cut rates in 2024.
High rates and yields hurt all kinds of investments, and they pack a particularly hard punch on stocks seen as the most expensive or requiring their investors to wait a long time for big growth.
Google's parent company, Alphabet, slipped 1.3% and was the heaviest weight on the S&P 500. A day earlier, it had leaped amid excitement about the launch of its latest artificial-intelligence offering. Other Big Tech stocks were stronger, with Nvidia, Apple and Microsoft all rising.
Also on the losing end was RH. The home furnishings company slumped 13.5% after reporting weaker results for the latest quarter than analysts expected.
Friday’s jobs report is one of the last major pieces of data the Fed will get before it announces its next move on interest rates Wednesday. The next comes on Tuesday, when the U.S. government gives the latest monthly update on how high inflation is for U.S. consumers.
The widespread expectation is still for the Fed to hold its main interest rate steady next week, according to data from CME Group. But traders are now betting on less than a 46% chance the Fed will have cut rates by March. That’s down from nearly 65% a day earlier.
Another preliminary report on Friday offered more encouragement. It said that U.S. consumers' expectations for inflation in the coming year dropped to 3.1% from 4.5% a month earlier, the lowest since March 2021. The Fed has said it pays close attention to such expectations, fearing a rise there could lead to a vicious cycle that keeps inflation high.
The preliminary report from the University of Michigan also said that sentiment among consumers strengthened enough to erase all its declines from the prior four months, mainly because of improved expectations for inflation.
In the oil market, crude prices rose to recover some of their sharp losses in recent months. A barrel of benchmark U.S. oil gained $1.89 to settle at $71.23, though it’s still more than $20 below where it was in September. It’s been tumbling on worries that demand from the global economy won’t be strong enough to absorb all the world’s available supplies.
Brent crude, the international standard, rose $1.79 to $75.84 per barrel.
In stock markets abroad, indexes were mostly higher in Europe and mixed in Asia. The Nikkei 225 dropped 1.7% for a second straight tumble amid speculation about whether the Bank of Japan will ease off its ultra-easy policy on interest rates.
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AP Business Writer Zimo Zhong contributed.
Stan Choe, The Associated Press
