Jan. 6 (UPI) — U.S. stock markets surged Friday after economic reports showed better-than-expected job growth and a cooling economy.
The Dow Jones Industrial Average soared 699.61 points, or 2.12%, to close at 33,629.69. The S&P 500 rose 86.92 points, or 2.28%, to 3,895.02, and the Nasdaq Composite climbed 264.05 points, or 2.56% to 10,569.29.
Friday’s rally pushed the three major indexes into positive territory for the first week of 2023, with the Dow and S&P 500 gaining 1.5% and the Nasdaq up 1% for the week.
Economic reports released Friday showed strong job growth and signs that inflation may be cooling after the Federal Reserve raised its target interest rate seven times in 2022, from near zero in March to a range of 4.25% to 4.5% in December.
“All investors care about is that the data suggests inflation is moving towards the Fed’s target,” Michael Arone, chief investment strategist at State Street Global Investors said, according to CNBC.
“That’s all investors care about and average hourly earnings suggest inflation continues to slow. They are excited about that.”
The Bureau of Labor statistics reported Friday that private employers added 223,000 jobs in December, pushing unemployment down to 3.5%. But growth of average hourly earnings slowed to 4.6%, below estimates of 5% growth.
The Institute for Supply Management reported Friday that the services purchasing managers’ index fell to 49.6 in December, down from 56.5 in November and marking the first time the index contracted since May 2020. A services PMI above 50.1 indicates expansion of the overall economy.
Costco was among the day’s biggest movers, gaining 7.26%. Others posting large increases include First Solar Inc., up 7.8%; Old Dominion Freight Line Inc., up 6.83%; Intel Corp., up 4.25%; and Walgreens Boots Alliance Inc., up 4.04%.
McDonald’s stock rose 2.79% after CEO Chris Kempczinski told employees the company is planning job cuts and a reorganization.