Wall Street climbs on bull market’s birthday as inflation fears ebb

NEW YORK (Reuters) – To celebrate the bull market’s ninth birthday on Friday, the three major US stock indexes climbed almost 2% and the Nasdaq closed at a record high, as February’s jobs report assuaged fears of inflation and aggressive interest rate hikes.

A month ago, the market had been spooked by wage growth that fueled inflation fears, leading to a spike in volatility and a stock market correction. That sentiment has reversed over recent weeks with the market gradually nudging higher.

The bull market, which began on March 9, 2009, is the second longest on record, leading to questions about how much longer it can last.

Along with the jobs data, stocks were supported by easing fears of trade wars and signs of a thaw in nuclear tensions with North Korea after US President Donald Trump said he was prepared to meet the country’s leader.

Inflationary fears dissipated on Friday after US Labor Department data showed nonfarm payrolls jumped by 313,000 jobs last month, while average hourly earnings rose only 0.1% compared with a 0.3% rise in January.

“If we can continue like that – keep the participation increasing and keep wages steady – that’s going to be a positive scenario so the market doesn’t get overly worried about inflation running away,” said Catherine Avery, president of Catherine Avery Investment Management in Greenwich, Connecticut.

But investors will be watching closely to see if data from one month becomes a trend, Avery said.

The Dow Jones Industrial Average rose 440.53 points, or 1.77%, to end at 25,335.74, the S&P 500 gained 47.6 points, or 1.74%, to 2,786.57 and the Nasdaq Composite added 132.86 points, or 1.79%, to 7,560.81.

The S&P spiked higher ahead of the close around the time The Wall Street Journal issued a report that Trump’s lawyers are seeking to use an interview with the president as leverage to end special counsel Robert Mueller’s Russia investigation. The story cited an unnamed person familiar with the discussions.

“The market is being driven by a very strong jobs report and lack of wage inflation. The Goldilocks economy reappears. But anything that accelerates the [Russia probe] and removes some uncertainty is good. The financial markets really dislike uncertainty,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

While the Dow ended 4.8% below January’s record high, it was 8.5% above its February lows. The S&P closed 3% below its January record high but 10% above last month’s lows.

For the week the S&P rose 3.5% while the Dow gained 3.25% and Nasdaq rose 4.2%.

The Bank of Israel on Friday set its representative rate for the US dollar at NIS 3.4530, for the Canadian dollar at NIS 2.6832, for the Australian dollar at NIS 2.6943, and for the South African rand at NIS 0.2901.

The central bank set the representative rate for the euro at NIS 4.2521, and for 100 yen at NIS 3.2353.

Advancing issues outnumbered declining ones on the NYSE by a 2.77-to-1 ratio; on Nasdaq, a 2.81-to-1 ratio favored advancers.

The S&P 500 posted 62 52-week highs and no lows; the Nasdaq Composite recorded 214 highs and 16 lows.

Volume on US exchanges was 6.82 billion shares, compared to the 7.47 billion average for the last 20 trading days.