Fed, job reports lift stocks

Stocks on Wall Street closed broadly higher Wednesday after wavering for much of the day as investors weighed the minutes from the Federal Reserve’s latest meeting of policymakers and welcomed encouraging data on job openings.

The major indexes rallied after a government report showed that job openings increased more than expected in November. Stocks then shed some of their gains after the minutes from the Fed meeting last month underscored how the central bank remains determined to keep rates high to crush inflation.

The Standard & Poor’s 500 index rose 0.8% after having been down 0.2% in the early going. The Dow Jones industrial average rose 0.4% and the Nasdaq composite added 0.7%. Small-company stocks outpaced the broader market, lifting the Russell 2000 index 1.2% higher.

The Fed raised its key short-term interest rate last month for the seventh time in 2022 and signaled more hikes to come.

The minutes from the mid-December meeting show that Fed officials remain determined to keep rates high and have taken little comfort from inflation’s decline from a peak of 9.1% in June to 7.1% in November.

Stocks rose before the release of the Fed minutes after the government reported that the number of job openings in November was higher than expected. The resilience in the labor market bolsters hopes on Wall Street that the economy can avoid sliding into a protracted recession.

“I think investors are right, that if we do fall into a recession, it’s not going to be a deep and prolonged recession,” said Jeffrey Roach, chief economist for LPL Financial.

The latest update on job openings is the first set of employment data that Wall Street will get this week. The government will release its weekly unemployment report Thursday and its closely watched monthly employment report, for December, on Friday.

Treasury yields ended lower Wednesday. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.68% from 3.75% late Tuesday. The yield on the two-year Treasury, which tends to track expectations for Fed action, slipped to 4.34% from 4.38%.

Energy stocks fell as the price of U.S. crude oil settled 5.3% lower.

More than 80% of the stocks in the S&P 500 rose. The index climbed 28.83 points to 3,852.97. The Dow added 133.40 points to close at 33,269.77. The Nasdaq rose 71.78 points to 10,458.76. The Russell 2000 gained 21.81 points to 1,772.54.