Wall Street rallies again, even as bond market signals worry

Stocks on Wall Street rallied again Thursday, extending the market’s winning streak to a fourth day and placing the major indexes on pace for weekly gains.

The S&P 500 rose 1.5%. It’s latest gain marks the longest winning streak for the benchmark index since March. The Dow Jones Industrial Average rose 1.1%, while the Nasdaq closed 2.3% higher.

Small-company stocks outpaced the broader market, a signal that some investors remain confident of economic growth. The Russell 2000 rose 2.4%.

Most of the market climbed, and energy-producing companies led the way after oil prices recovered a chunk of their sharp losses from earlier in the week. The bond market is still showing signs of worry about a possible recession, though.

A report on Thursday showed more workers filed for unemployment benefits last week than expected. A report on Friday will show more broadly how the jobs market is doing.

The S&P 500 rose 57.54 points to 3,902.62, as roughly three-fourths of the stocks in the index rose. The Dow rose 346.87 points to 31,384 and the Nasdaq rose 259.49 points to 11,621.35. The Russell 2000 gained 42.06 points to 1,769.60.

Companies that benefit the most from a healthy economy led the gains, with technology stocks doing much of the heavy lifting. Apple rose 2.4%.

The energy sector also rose as U.S. crude oil prices climbed 4.3% after falling the last few days. Exxon Mobil rose 3.2%.

The major indexes are on pace for weekly gains in what has been turbulent trading over the last several months. The volatility reflects growing worries among investors that the economy is slowing under the weight of surging inflation and sharply higher interest rates, pressures that could tip the economy into a recession.

Despite this week’s rally in the stock market, bond investors continue to signal anxiety over a potential recession. New data Thursday showed that the number of Americans applying for unemployment benefits topped the 230,000 mark for the fifth consecutive week. While claims remain low, last week was the highest level of claims in almost six months.

The yield on the 10-year Treasury rose to 3% from 2.91% late Wednesday. The yield on the two-year Treasury is above the 10-year yield, a relatively rare thing seen by some investors as an ominous sign.

Consumers have been pulling back on spending as inflation puts a tighter squeeze on budgets. Russia’s invasion of Ukraine in February sent energy prices surging in 2022, resulting in record gasoline prices in the U.S. Pain at the pump has only worsened the broader impact from inflation, though there are signs that gasoline prices have begun to recede.