Antelope Valley Press

Wall Street shaves off some losses to close its worst week

- By STAN CHOE AP Business Writer

NEW YORK — Wall Street closed its worst week since Halloween with a listless Friday after reports showed workers are getting bigger raises, but key parts of the economy still don’t look like they’re overheatin­g.

The S&P 500 rose 8.56 points, or 0.2%, to 4,697.24 after drifting between small gains and losses through the day. It capped the first down week for the index in the last 10, after it roared into 2024 on hopes that inflation and the overall economy are cooling enough for the Federal Reserve to cut interest rates sharply through the year.

The Dow Jones Industrial Average rose 25.77, or 0.1%, to 37.466.11 and inched closer to its record set earlier in the week. The Nasdaq composite added 13.77, or 0.1%, to 14,524.07.

Treasury yields swung sharply in the bond market following the economic reports. They initially climbed after the latest monthly jobs report showed US employers unexpected­ly accelerate­d their hiring last month. Average hourly pay for workers also rose, when economists had been forecastin­g a dip.

Such strong numbers are good news for workers, and they should keep the economy humming. That’s a positive for corporate profits, which are one of the main factors that set prices for stocks.

But Wall Street’s worry is the strong data could also convince the Federal Reserve upward pressure remains on inflation. That in turn could mean the Fed will hold interest rates high for longer than expected. Interest rates affect the other big factor setting stock prices, with high ones hurting financial markets.

The jobs report briefly forced traders to push out their forecasts for when the Fed could begin to cut rates. But a report later in the morning showed that growth for finance, real estate and other companies in the US services industries slowed by more than economists expected last month.

Following that report, traders quickly built bets back up for the Fed to begin cutting rates in March. They’re now forecastin­g a nearly two-in-three chance of that, similar to a day earlier, according to data from CME Group.

Altogether, the data could bolster Wall Street’s building hopes for a perfect landing for the economy, one where it slows just enough through high interest rates to stamp out high inflation but not so much that it causes a recession.

After climbing as high as 4.09% immediatel­y after the jobs report, the yield on the 10-year Treasury fell to back to 3.96% following the weaker-than-expected report on services industries. It eventually pulled back to 4.04%, compared with 4.00% late Thursday.

On Wall Street, Constellat­ion Brands climbed 2.1% after the seller of Corona and Modelo beers in the United States reported stronger profit for the latest quarter than analysts expected.

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