THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
The S&P 500 was 0.7% higher in afternoon trading. It's on track to clinch its best closing level since the middle of September, along with a third winning week in the last four. The Dow Jones Industrial Average was up 177 points, or 0.5%, at 34,126, as of
Helping to lead the way was
Another big gain for Tesla's stock was also supporting the market. It rose 12.1% following its stronger-than-expected profit report for the end of 2022 released earlier in the week.
Such gains helped offset a steep loss for Intel following a jolting warning from the chipmaker. Not only did its revenue and earnings fall short of expectations last quarter amid a punishing slowdown in sales, it also gave a forecast for revenue this quarter that was more than
Hasbro fell 7.5% after saying it “underperformed” in this past holiday shopping season and will likely report a 17% drop in revenue for the fourth quarter. The company will cut about 1,000 jobs to reduce costs.
So far, the job market has remained remarkably resilient despite a slowing overall economy. Almost all of the high-profile layoff announcements have been within the tech industry, which raced to expand after the pandemic sent demand for technology soaring. But layoffs may be starting to spread to other industries.
Earnings reporting season is entering its heart, and companies have been offering mixed results and forecasts. That’s helped lead to some big swings in markets.
Two competing big ideas have been sending
The market is partly trying to reconcile that weak earnings and a drop in demand may be necessary for inflation to keep cooling, said
“It's kind of like this is the medicine the economy has to take,” he said.
Economic reports on Friday backed up recent data points suggesting inflation continues to moderate. The measure that the Fed prefers, which strips out food and energy costs, was 4.4% higher in December than a year earlier. That was down from 4.7% inflation in November and was equal to economists’ expectations.
More broadly, inflation slowed to 5% in December from a year earlier, down from 5.5% in November, according to the personal consumption expenditures price index.
Reports also showed that income growth for Americans slowed in December, while consumer spending fell off a bit more sharply than expected.
A separate report said
Keeping such expectations anchored is key for the Fed, which wants to avoid a vicious cycle where households expecting high inflation make moves that only make it worse.
Economists said Friday's data likely keeps the Fed on track to raise its key benchmark rate by 0.25 percentage points at its meeting next week. That would be a step down from its increase of 0.50 points last month and four straight hikes of 0.75 points before that.
Smaller increases would mean less added pressure on the economy, which has already seen damage done to the housing industry and other areas because of last year's surge in rates.
The yield on the 10-year
Next week could be another busy one for markets, with several high-profile events on top of the Fed's announcement. The
In stock markets overseas,
AP Business Writers
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