Market Rallies After Comments

Fed governor says he wants just quarter-point increase in interest rates
By Newser Editors and Wire Services
Posted Jan 20, 2023 4:04 PM CST
After Worrying, Market Rallies
Federal Reserve Board Chair Jerome Powell, left, and board member Christopher Waller at a swearing-in ceremony last May in Washington.   (AP Photo/Patrick Semansky)

A rough week on Wall Street dominated by worries about a weakening economy ended Friday with a broad rally that gave the market its best day in two weeks. The Dow rose 330.93 points, or 1%, to 33,375.49; the S&P 500 climbed 73.76 points, or 1.9%, to 3,972.61; and the Nasdaq was up 288.16 points, or 2.7%, to 11,140.43. The Russell 2000 also rose: 30.99 points, or 1.7%, to 1,867.34, the AP reports. Technology and communication services stocks powered much of the gains as investors cheered another quarterly surge in Netflix's subscribers. Remarks from a Federal Reserve official also brought hope to investors that the central bank may slow its pace of interest rate hikes as soon as next month.

The major indexes started the week in the red largely because of worries that the economy may not avoid a scarring recession. Several reports on the economy came in weaker than expected, as the full weight of the Federal Reserve's hikes to interest rates last year make their way through the system. Not long ago, bad news on the economy was often perversely good news for Wall Street. That's because investors took it to mean the Fed may ease up on its rate hikes. But bad news on the economy is increasingly becoming bad news for Wall Street, too, which is worrying more about the prospects of a serious recession. Fed Gov. Christopher Waller said Friday he favors just a quarter-point hike on Feb. 1, when the central bank gives its next update. He also said rates are already high enough to slow the economy. The remarks could have helped calm increasing worries.

(More stock market stories.)

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