Financial Markets                      05/03 15:23

   

   Stocks closed sharply higher on Wall Street, erasing their 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 1.3% Friday, its biggest gain since February. The 
Dow Jones Industrial Average rose 1.2%. and the Nasdaq composite climbed 2%. 
U.S. employers added 175,000 jobs last month, down sharply from a big increase 
in March. Apple jumped after announcing a mammoth $110 billion stock buyback.

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

   Stocks are rising on Wall Street Friday following a government report 
showing job growth rose modestly in April, a sign that persistently high 
interest rates may be starting to take a bigger toll on the world's largest 
economy.

   The S&P 500 was 1.3% higher in afternoon trading and on track to erase its 
losses for the week. The Dow Jones Industrial Average gained 468 points, or 
1.2%, as of 2:55 p.m. Eastern. The Nasdaq composite added 2.1%.

   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. April's average hourly earnings also rose 
less than expected. The report suggests that the Federal Reserve's aggressive 
streak of rate hikes may finally be cooling the pace of hiring.

   "The demand for labor is slowing, which will eventually ease inflation 
pressures, giving the Fed some leeway to cut rates later this year," said 
Jeffrey Roach, chief economist for LPL Financial. "Slower payroll growth and 
fewer hours worked imply the economy is slowing at a measured pace. This jobs 
report is consistent with the soft landing narrative."

   Treasury yields in the bond market mostly fell following the jobs report. 
The yield on the 10-year Treasury, which lenders use as a guide for pricing 
home loans, eased to 4.5% from 4.59% late Thursday. The two-year yield, which 
moves more closely with expectations for the Fed, fell to 4.81% from 4.88%.

   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. That is essentially the "soft landing" 
the Fed is hoping to achieve as it tries to cool the rate of inflation to its 
target of 2%. Inflation at the consumer level stood at 3.5% in March, far below 
the peak of 9.1% nearly two years ago.

   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.

   "Some of this data coming out of the employment report dampens that 
narrative a little bit," said Charlie Ripley, senior investment strategist for 
Allianz Investment Management. "They want to cut interest rates, but they need 
more confidence in the inflation data and today's wage data is a little bit 
more confidence for them."

   The Fed's main interest rate has been sitting at its highest level since 
2001, and cuts would release some pressure on the economy and financial markets.

   The benchmark S&P 500 fell 4.2% in April, its first monthly loss since 
October, as signals of stubbornly high inflation forced traders to ratchet back 
expectations for when the Fed could begin easing interest rates.

   After coming into the year forecasting six or more cuts to rates in 2024, 
traders are now largely betting on just one or two, if any, according to data 
from CME Group.

   Technology stocks accounted for much of the rally Friday. Apple jumped 7.2% 
after announcing a mammoth $110 billion stock buyback. The tech giant reported 
late Thursday its steepest quarterly decline in iPhone sales since the outset 
of the pandemic.

   Microsoft rose 2.1% and Nvidia added 3.6%.

   Several companies notched gains after reporting strong quarterly results.

   Amgen climbed 12.4% after the biotechnology company gave investors an 
encouraging update on a potential obesity drug. Live Nation Entertainment added 
7.6% after the ticket seller and concert promoter beat analysts' first-quarter 
revenue forecasts.

   Motorola Solutions was 5% higher after the communications equipment maker 
raised its profit forecast for the year.

   Booking Holdings rose 3.7% after reporting better-than-expected 
first-quarter bookings and revenue. Another online travel company, Expedia 
Group, didn't fare as well. Its shares slumped 14.6% after the company's latest 
quarterly results 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, Germany's DAX gained 0.6%, while the CAC 40 in Paris rose 0.5% 
and London's FTSE 100 added 0.5%.

   Markets in Tokyo and mainland China were closed for holidays. The Japanese 
yen strengthened slightly against the dollar.

   ---------

   itemid:ac3cb3e24d7a9100a19b027ec350901c