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Stocks make gains, oil prices rise as OPEC raises production

UPDATED: Thu., June 2, 2022

The New York Stock Exchange logo is shown on March 16, 2022, in New York. Stocks turned higher in afternoon trading on Wall Street Thursday.  (Associated Press )
The New York Stock Exchange logo is shown on March 16, 2022, in New York. Stocks turned higher in afternoon trading on Wall Street Thursday. (Associated Press )
By Damian J. Troise Associated Press

NEW YORK — Stocks on Wall Street overcame a shaky start to close broadly higher Thursday, as the major indexes more than made up for their losses earlier in the holiday-shortened week.

The S&P 500 rose 1.8%, with more than 85% of the stocks in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3%, while the Nasdaq climbed 2.7%.

Technology stocks accounted fore a big share of the gains as Microsoft erased an early loss. Bond yields eased.

Trading has been choppy in recent days as investors remain worried about inflation and the interest rate increases the Federal Reserve is using to fight it.

Thursday’s market rally may have been spurred, in part, by a report showing private sector hiring that came in well below economists’ forecasts.

“The private payroll report was pretty weak,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management.

“It’s maybe one of those environments where people are looking for weak data that gives them some hope that the Fed will pause (rate hikes) in September.”

The S&P 500 rose 75.59 points to 4,176.82. The index has risen 7.1% since coming to the edge of a bear market two weeks ago.

The Dow added 435.05 points to 33,248.28, while the Nasdaq gained 322.44 points at 12,316.90.

Rising energy prices have been feeding inflation, which is already at its highest levels in four decades.

U.S. gasoline prices hit another record high Thursday, with the average price at the pump costing $4.71 per gallon, according to motoring club federation AAA.

Investors remain focused on the balance between inflation, rising interest rates and economic growth.

The Federal Reserve is being closely watched as it tries to temper the impact from inflation by raising interest rates from historic lows during the pandemic.

Several economic reports on Wednesday bolstered expectations for the Fed to keep raising interest rates aggressively.

Wall Street is concerned that the Fed could slow economic growth too much and potentially send the economy into a recession.

But on Thursday, payroll processor ADP reported that hiring by private U.S. companies rose just 128,000 in May. That’s well below the 302,000 hires economists expected, according to FactSet.

Wall Street will get another glimpse into the health of the broader economy on Friday when the Labor Department releases its employment report for May.

The jobs market had initially been slow to recover from the impact of the virus pandemic, but has bounced back strongly with low unemployment and plentiful job postings.

Meanwhile high inflation is eating into corporate profits, while the war in Ukraine and COVID-19 restrictions in China have also weighed on markets.

Technology stocks, whose lofty values tend to give the broader market a harder push higher or lower, accounted for a big share of the rally Thursday. Chipmaker Nvidia jumped 6.9% and software maker Adobe rose 5.5%.

Communications stocks, companies that rely on direct consumer spending and some big industrial firms gained ground. Facebook parent Meta Platforms rose 5.4%, Expedia Group added 6.3% and Boeing climbed 7.5%.

Small company stocks rose, signaling confidence about economic growth. The Russell 2000 gained 42.85 points, or 2.3%, to 1,897.67.

Bond yields were relatively stable. The yield on the 10-year Treasury, which helps set interest rates on mortgages and other loans, fell to 2.91% from 2.93% from late Wednesday.

Energy stocks fell. Chevron slipped 0.2%.

Investors continue monitoring corporate earnings and financial updates. Microsoft rose 0.8%, recovering from an early slide, after cutting its financial forecasts for the current quarter.

The software pioneer cited unfavorable changes in exchange rates. Online pet store Chewy surged 24.2% after reporting strong earnings.

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