Stocks rise on Wall Street and break a 4-day losing streak

An NYSE sign is seen on the floor at the New York Stock Exchange.
Stocks had slammed into a wall this month after leaping in January as Wall Street raised its forecasts for how high the Fed will take rates and then how long it will keep them there.
(Seth Wenig / Associated Press)
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Stocks climbed on Thursday after a seesaw day on Wall Street to break out of their longest losing streak since December.

The Standard & Poor’s 500 rose 0.5% for its first gain in five days. The Dow Jones industrial average gained 108 points, or 0.3%, while the Nasdaq composite added 0.7%.

Tech stocks helped lead the way after Nvidia reported better results for the latest quarter than expected. Its shares jumped 14% after it also gave a forecast for upcoming revenue that topped some analysts’ expectations. It cited recovering strength in video gaming and demand for artificial intelligence products.


It’s a turnaround for tech and high-growth stocks, which have struggled recently because of worries about rising interest rates. They’re seen as some of the most vulnerable as the Federal Reserve jacks rates higher in hopes of stamping out inflation.

High rates hurt prices for investments, particularly those seen as the riskiest, most expensive or whose big growth is furthest out in the future. They also raise the risk of a recession because they slow the economy.

Nearly all Fed policymakers agreed this month to slow the pace of interest rate increases to a quarter-point, with ‘a few’ supporting a larger hike.

Feb. 22, 2023

After leaping in January, stocks broadly have slammed into a wall this month on worries that inflation isn’t cooling as quickly or as smoothly as hoped. A lengthening list of reports have shown the economy is in stronger shape than expected.

While that’s raised hopes about avoiding a recession in the near term, it’s also forced Wall Street to raise its forecasts for how high the Fed will take interest rates and then how long it will keep them there.

The latest economic data released on Thursday also suggested an economy with enough strength to encourage the Fed to to press on with its “higher for longer” campaign on rates. The fear is that a strong economy could feed into upward pressure on inflation.

Fewer workers applied for unemployment benefits last week than expected, another indication that the job market remains resilient despite the fastest increase in rates in decades.


A separate report said the U.S. economy’s growth was probably a touch weaker in the last three months of 2022 than earlier estimated. But it still grew at a 2.7% annual rate.

Sam Stovall, chief investment strategist at CFRA Research, said stronger economic data going back to the jobs report at the start of the month pushed him to add one more rate hike to his forecast before the Fed takes a pause. He also pushed out how long he thinks it may take the S&P 500 to get to his target level of 4,575. Instead of thinking it could happen by the end of this year, he thinks it could be 12 months from now.

“The bond market has been pretty pessimistic right from the start, assuming that inflation would be higher for longer, that we do have the likelihood of a recession,” Stovall said.

“Our belief is that it probably won’t be a repeat of the Great Recession. In terms of timing, it could actually be fairly similar to the recession of 2001. It could end up being fairly short and happens 14 months after the start of the bear market” for stocks.

Mixed signals — including layoffs, strong job growth and lingering inflation — have clouded the U.S. economic outlook.

Feb. 9, 2023

Wall Street’s heightened expectations for the Fed have been most evident in the bond market, where Treasury yields have shot higher this month. They eased a bit on Thursday, taking some pressure off stocks.

The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, dipped to 3.88% from 3.93% late Wednesday.


Earlier this week, it topped 3.95% as it raced toward its highest level since November.

On the losing end of Wall Street was Moderna, whose shares slid 6.7% after it reported its fourth-quarter profit tumbled 70% as COVID-19 vaccine sales fell and the drugmaker caught up on a royalty payment.

Domino’s Pizza dropped 11.7% despite reporting stronger profit than expected. Its revenue fell short of forecasts, and it lowered the top and bottom ends of its forecast range for global sales growth in the next two to three years.

Lordstown Motors tumbled 11.4% to $1.09 after it said it’s temporarily halting production and deliveries of its Endurance electric pickup because of performance and quality issues with certain components.

All told, the S&P 500 rose 21.27 points to 4,012.32. The Dow added 108.82 to 33,153,91, and the Nasdaq climbed 83.33 to 11,590.40.

AP business writers Joe McDonald and Matt Ott contributed to this report.