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 Dow climbed 25.77, or 0.1%, to 37.466.11, inching closer to its record set earlier in the week.
- 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.
- The Nasdaq composite added 13.77, or 0.1%, to 14,524.07.
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, the AP reports, 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 that 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 2-in-3 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 in which it slows just enough through high interest rates to stamp out high inflation but not so much that it causes a recession.
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