Wall Street leaps, nearly escapes its bear market after strong jobs report

NEW YORK (AP) — Stocks rushed higher Friday after a strong report on the U.S. job market suggested a recession may not be as close as Wall Street had feared.

The S&P 500 leaped 1.5% for the latest surge in a rally that’s vaulted it nearly 20% since mid-October. That put Wall Street’s main measure of health on the edge of entering what’s called a “bull market” despite a long list of challenges.

The Dow Jones Industrial Average rallied 701 points, or 2.1%, while the Nasdaq composite gained 1.1%.

The indexes got a boost after a report showed employers unexpectedly accelerated their hiring last month. It’s the latest signal that the job market remains remarkably solid despite much higher interest rates, and it offers a hefty pillar of support for an economy that’s begun to slow.

Areas of the market that do best when the economy is healthy led a widespread rally, including stocks of industrial companies, energy producers and banks. Exxon Mobil rose 2.3% as prices for crude oil climbed on hopes that a resilient economy would burn more fuel.

Perhaps more importantly for markets, the Labor Department’s monthly jobs report also showed a slowdown in increases for workers’ pay even as hiring strengthened.

While that may discourage workers trying to keep up with prices at the register, investors believe slower wage gains will mean less upward pressure on inflation across the economy.

That in turn could allow the Federal Reserve to take it easier on its hikes to interest rates meant to lower inflation. High rates do that by slowing the economy and hurting investment prices, and they’ve already caused pain for the banking and manufacturing industries.

The unemployment rate also rose by more than expected last month, moving up to 3.7% from a five-decade low. That implies a bit more slack in the job market and seems to conflict with the gangbusters hiring numbers, whose data comes from a separate survey.