The major averages surged after the December jobs report and an economic activity survey showed signs that inflation may be cooling, signaling that the Federal Reserve's interest rate hikes are having their intended effect. The Dow Jones Industrial Average increased 700.53 points, or 2.13%, to close at 33,630.61. The S&P 500 ended up 86.98 points, or 2.28%, to 3,895.08. The Nasdaq Composite added 2.6%, which equates to 264.05, to end at 10,569.29.
It was the best day for the Dow and S&P 500 since Nov. 30 and the best for the Nasdaq since Dec. 29. Every Dow component ended Friday up.
Friday's rally helped stocks end in positive territory for the week, which was the first of the year. The Dow and S&P 500 each closed the week up 1.5%. The Nasdaq advanced 1%.
The December nonfarm payrolls report showed that the U.S. economy added 223,000 jobs last month, slightly higher than the expected 200,000 jobs economists polled by the Dow Jones expected. In addition, wages grew slower than anticipated, increasing 0.3% on the month where economists expected 0.4%.
"All investors care about is that the data suggests inflation is moving towards the Fed's target," said Michael Arone, chief investment strategist at State Street Global Advisors. "That's all investors care about and average hourly earnings suggest inflation continues to slow. They are excited about that."
Stocks rose again when the ISM's nonmanufacturing purchasing managers' index showed that the services industry contracted in December, a sign that the Fed's rake hikes may be working to slow the economy.
All 11 S&P 500 sectors traded up as stocks rallied Friday afternoon.
Materials posted the biggest gain, adding 3.4%. Health care lagged the other 10 sectors, but was still up 1%.
All but one sector were on pace to close the week higher than where each started. Communication services was poised for the biggest gain despite trailing Friday, on track to finish the week up 3.8%. Health care was the sole sector on pace to close the week lower, at 0.1% down.
Shares of Biogen resumed trading shortly after 3 p.m. and extended their gains.
The biotech stock trading was up by more than 5.2% after the FDA granted accelerated approval to a new Alzheimer's drug. The stock was up about 3.6% before it was halted at 2 p.m.
Party City's stock hit a 52-week low Friday, dropping approximately 50% after the Wall Street Journal reported the retailer was planning to file for bankruptcy within weeks.
A share of Party City stock traded around 17 cents at 2 p.m. That's a 97% drop from the $6.55 price the stock closed at on Jan. 6, 2022.
The stock lost 93.4% of its value in 2022. Its share price has dropped for each of the past five years besides 2020, when it leapt up 162.8% as the pandemic prompted an unexpected shift in consumer spending to goods.
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