Gains for tech stocks help soften Wall Street's rough week

An NYSE sign is seen on the floor at the New York Stock Exchange in New York, Wednesday, June 15, 2022. (AP Photo/Seth Wenig, File)

NEW YORK (AP) — A rough week for Wall Street appears to be heading for a calmer end, with gains for some big tech-oriented stocks on Friday helping to steady the market.

The S&P 500 was 0.6% higher in morning trading. The Dow Jones Industrial Average was up 36 points, or 0.1%, at 33,080, as of 10:30 a.m. Eastern time, while the Nasdaq composite was 1.1% higher.

The moves have the S&P 500 on track for a loss of 2% this week, its first down week in the last three, largely because of worries that the economy may not be able to avoid a scarring recession. Several reports came in weaker than expected, as the full weight of the Federal Reserve’s hikes to interest rates last year start to make their way through the economy.

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 now sees it as increasing the risk of a punishing recession.

Making things more complicated, several Fed officials through the week kept pounding the message that they’ll likely hike rates further and then hold them there a while to make sure the nation’s high inflation is really crushed. Even though inflation has begun to slow, upward pressure remains on it from a still-solid U.S. jobs market and other factors.

Many investors on Wall Street came into this week already forecasting a modest or short recession, but they also were hoping for a rebound in markets toward the end of the year because of expectations for the Fed to cut interest rates to prop up the economy. This week’s sour economic data and comments from central bankers put dents in such hopes.

Gains for tech-oriented stocks were helping to keep Wall Street relatively steady Friday. Google’s parent company said it was cutting costs by laying off 12,000 workers, and Netflix reported a surge in its number of subscribers.

Alphabet rose 4.5% after becoming the latest Big Tech company to acknowledge it expanded too quickly in recent years amid a boom created by the pandemic. Netflix jumped 6.9%.

On the losing end was Nordstrom, which said it had to slash prices to clear out inventory during the holiday shopping season. Its stock fell 0.6% after it cut its profit forecast for its fiscal year.

It joins a growing list of retailers to warn about how high inflation and interest rates are sapping the strength and spending ability of its customers.

Treasury yields were climbing Friday, clawing back some of their drops from earlier in the week driven by worries about a weakening economy. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, rose to 3.45% from 3.40% late Thursday.

The two-year yield, which tends to more closely track expectations for Fed action, rose to 4.19% from 4.13%.

Stock markets overseas mostly made modest gains.

The Nikkei 225 added 0.6% after Japan reported that its consumer inflation rate hit 4% in December, its highest level in 41 years. The high reading may add to pressures on the Bank of Japan to alter its longstanding policy of keeping its key interest rate at an ultra-low level of minus 0.1%. But economists expect price pressures to ease in coming months as inflation elsewhere declines.

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AP Business Writers Joe McDonald and Matt Ott contributed.