May 30th, 2024

Stock market today: Wall Street surges as key report shows pullback in hiring

By Elaine Kurtenbach And Matt Ott, The Associated Press on May 3, 2024.

NEW YORK (AP) – Wall Street opened sharply higher, erasing its losses for the week, after the government reported a cooldown in hiring last month. For markets that was a welcome sign that the Federal Reserve’s efforts to fight inflation by slowing the economy with high interest rates might be making some progress. The S&P 500 rose 1% in early trading Friday. The Dow Jones Industrial Average added 445 points, and the Nasdaq composite climbed 1.7%. U.S. employers added 175,000 jobs last month, down sharply from a blockbuster increase in March. Apple jumped almost 7% after announcing a mammoth $110 billion stock buyback.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street pointed toward big gains Friday as a key report showed modest job growth in April, a sign that persistently high interest rates may be starting to take a bigger toll on the world’s largest economy.

Futures for the S&P 500 rose 1.2% before the bell, while futures for the Dow Jones Industrial Average gained 1.4%.

The nation’s employers added 175,000 jobs last month, down sharply from the blockbuster increase of 315,000 in March. It was also well below the 233,000 gain that economists had predicted, suggesting that the Federal Reserve’s aggressive streak of rate hikes may finally be cooling the pace of hiring.

The yield on the 10-year Treasury fell to 4.48% from 4.58% late Thursday.

The U.S. economy is in a tight spot, where the hope is that it remains strong enough to stay out of a recession but not so strong that it worsens the already stalled progress on inflation.

Stubbornly high readings on inflation this year pushed Federal Reserve Chair Jerome Powell to say on Wednesday that it will likely take “longer than previously expected” to get enough confidence about inflation to cut interest rates.

In equities trading early Friday, Apple rose 6% after the tech giant raised its dividend and announced a $110 billion share buyback, even as it posted the steepest quarterly decline in iPhone sales since the outset of the pandemic.

Expedia fell 12.2% after the online travel company beat Wall Street targets but lowered its full-year bookings guidance because its Vrbo rental unit has been slow to recover from its migration to Expedia’s platform.

In Europe at midday, Germany’s DAX gained 0.4%, while the CAC 40 in Paris and London’s FTSE 100 each picked up 0.5%.

Markets in Tokyo and mainland China were closed for holidays.

The Japanese yen strengthened slightly against the U.S. dollar amid signs of heavy central bank intervention to tamp down the dollar’s advance.

The financial newspaper Nihon Keizai Shimbun reported that estimates showed the government spending an estimated 8 trillion yen (about $50 billion) in reserves this week to try to keep the yen from slipping further against the dollar.

The weaker yen has helped boost prices for imported goods, a factor behind the Bank of Japan’s recent decision to give up its negative interest rate policy and raise its benchmark rate to zero to 0.1% from a longstanding level of minus 0.1%. It might raise rates further, Marcel Thieliant of Capital Economics said in a commentary, even if its target of 2% isn’t met.

“Even though the economic case for preventing the yen from sliding is much weaker, the Ministry of Finance seems to have responded with an even more forceful round of foreign exchange interventions this week than it did two years ago,” Thieliant said.

While a weak yen is a boon for Japanese companies that earn much of their revenues overseas, significant shifts in the foreign exchange market can play havoc with corporate planning and a sharply weaker yen also boosts costs for imports of oil and other vital commodities.

The dollar was trading at 153.18 yen early Friday, down from 153.65 late Thursday. The euro rose to $1.0748 from $1.0727.

In Asian trading, Hong Kong’s Hang Seng jumped 1.5% to 18,475.92, tracking gains on Wall Street. News of fresh moves by Chinese leaders to energize the economy also helped drive buying of technology shares.

E-commerce giant Alibaba climbed 4.1% and rival JD.com was up 5.5%. Baidu advanced 4.4%.

Australia’s S&P/ASX 200 gained 0.6% to 7,629.00 and the Kospi in Seoul slipped 0.3% to 2,676.63. Taiwan’s Taiex picked up 0.5%.

India’s Sensex shed 0.9% to 73,952.37.

On Thursday, the S&P 500 rose 0.9%, a day after swinging sharply when the Federal Reserve said it’s likely delaying cuts to interest rates but not planning to hike them. That more than halved its losses for the week. The Dow advanced 0.9% and the Nasdaq composite jumped 1.5%.

In energy trading, U.S. benchmark crude oil gained 35 cents to $79.30 per barrel in electronic trading on the New York Mercantile Exchange. It lost 5 cents on Thursday.

Brent crude, the international standard, added 43 cents to $84.10 per barrel.

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