Stock market today: Apple juices rally after a brutal week | National news

NEW YORK (AP) Apple led a rally Friday after Wall Street’s most influential stock reported better than feared earnings. Shares of downed banks are also making big jumps to recoup some of their hefty losses from a brutal week.

The S&P 500 was up 1.5% in afternoon trading, though it is still on track for its worst week in nearly two months. The Dow Jones Industrial Average was up 418 points, or 1.3%, to 33,546, as of 1:04 p.m. Eastern Time, while the Nasdaq composite was up 1.9%.

Government bond yields rose in the bond market after a report showed it recruitment accelerated across the economy by much more than expected last month. The US government’s jobs report also found that workers received larger-than-expected pay increases in April.

While that’s good news, especially with many economists fearing a recession this year, the data also raises concerns that inflation may remain high and the Federal Reserve to keep interest rates higher.

High interest rates have already taken care of it cracks in the American banking system, and the fear of what could be next fall have rocked the industry. This week began with regulators seizing First Republic Bank, the third major bank failure in the US since March.

Investors are on the hunt for the next possible weak link in the system and have lowered stock prices for those deemed risky by customers for a sudden exodus. That’s even when banks protested seeing deposit levels stabilize or strengthen. Several of the hardest hit recovered some of their steep losses on Friday.

PacWest Bancorp was up 80.7%, though it’s still down 43% this week. Western Alliance Bancorp gained nearly 49.2% to trim its loss for the week to 27%.

The concern is that falling stock prices could create a vicious cycle for banks that leads to customers losing confidence and withdrawing their deposits, which in turn creates more fear for the system.

Apple not up as much as those banks did Friday, but its moves pack a more powerful punch to the market. Apple is the most valuable stock on Wall Street, so its movements weigh excessively on the S&P 500 and other indices.

With a gain of 4.5%, it was the biggest driver in the S&P 500. The iPhone maker reported a drop in profit and revenue, but the results nevertheless beat analysts’ expectations.

The story was similar in the broader market for results during the first three months of the year. Analysts started this earnings reporting season with very low expectations given high interest rates and a slowing economy.

Companies in the S&P 500 are on track to report a second consecutive quarter of earnings declines from last year’s levels, suggesting what Wall Street is calling an earnings recession. But the results are largely better than feared, which has contributed to some support for the market.

Live Nation Entertainment rose 16.5% after reporting a more modest loss than analysts had expected, while Cigna Group rose 7.1% after beating earnings and revenue forecasts.

Lyft fell 21.1% after first-quarter revenue fell short of Wall Street expectations and investors were given a weak current-quarter revenue forecast. Competitor Uber gained 11% on Tuesday after reporting strong financial results and is still solidly up this week.

In the bond market, yields rose immediately after the jobs report, as traders bet it would prompt the Fed to keep rates high for longer than previously expected.

The Fed said on Wednesday it was unsure of its next move after raising overnight rates to a range of 5% to 5.25%, up from near zero early last year. It has raised rates at the fastest pace in decades to curb inflation, but the tool is also slowing the economy and hurting investment prices.

Many traders expect the Fed to hold rates steady at its next meeting in June, which would be the first time in more than a year that this has happened. After that, expectations diverge.

The Fed has insisted on seeing inflation come down slowly, which would mean interest rates would stay high for a while, if not rise further if inflation accelerated again. Meanwhile, many traders see the economy weakening enough that the Fed will have to cut rates later this year.

The turmoil in the US banking sector is adding to the uncertainty. If it causes banks to withdraw their loans, then so be it could work as fare increases further suffocating the economy.

Friday’s jobs report offered encouraging and discouraging news depending on the outlook.

The strong hiring figures again confirm that the labor market remains resilient. It supports the rest of the economy, which is already starting to slow under the weight of much higher interest rates.

More worrying for pessimists, however, was the 4.4% year-on-year rise in worker wages. The fear is that excessive wage increases could prompt companies to raise prices for their own goods and take other steps that create a vicious cycle that keeps inflation high. That, in turn, could put pressure on the Fed to keep rates high longer, breaking more things than First Republic.

The yield on the 10-year Treasury rose from 3.38% at the end of Thursday to 3.45%. It helps set rates for mortgages and other important loans.

The two-year rate, which moves more according to the Fed’s expectations, rose from 3.79% to 3.92%

AP Business Writers Joe McDonald and Matt Ott contributed.

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