Stock market today: Most of Wall Street is up, adding to the winning week

NEW YORK (AP) Stocks rose again Thursday after more companies reported better-than-expected earnings, while earnings rose after a Federal Reserve official warned the end of rate hikes may not come as soon as Wall Street had hoped.

The S&P 500 gained 0.9%, adding to the previous day’s rally as hopes mount that the US government will pull off a disastrous standard on his fault. The Dow Jones Industrial Average added 115 points, or 0.3%, while the Nasdaq composite rose 1.5%.

Video game maker Take-Two Interactive rocketed to the biggest gain in the S&P 500 after forecasting a massive increase in sales for the next fiscal year. That fueled speculation that Grand Theft Auto VI is on its way, and the stock rose 11.7%.

Bath & Body Works followed closely with a gain of 10.7%. It reported stronger revenue and profit for the last quarter than analysts had expected.

Wall Street was also supported by another retailer, walmart, which rose 1.3% after reporting stronger-than-expected results for the final quarter. It raised its full-year financial forecast, though it said shoppers remain cautious about spending.

There has been a lot of focus on the retail sector, as strong US household spending has been one of the main pillars in keeping the slowing economy out of recession.

Equities have remained remarkably resilient since early April, despite a long list of concerns. A major reason for this is the hope that the Fed will ease up on its rate hikes, which have slowed inflation at the cost of risking a recession and driving prices down in the financial markets.

The widespread guess was that the Fed would take a break at its next meeting in June. But Dallas Fed President Lorie Logan tempered some of those hopes in a prepared speech to the Texas Bankers Association.

The data in the coming weeks may yet show that skipping a meeting is appropriate, Logan said. But as of today we are not there yet.

Treasury yields rose as traders raised bets that the Fed would hike rates again at its June meeting, though the majority still predicts a pause.

The yield on the 10-year Treasury rose from 3.57% at the end of Wednesday to 3.64%. The two-year interest rate, which moves more in line with the Fed’s expectations, rose from 4.16% to 4.25%.

Higher rates have already slowed the economy and led to three of the largest US bank failures in history since March. The news about the economy came in mixed on Thursday.

One showed that fewer workers applied unemployment benefits last week than expected. While this is good news for workers and for a so far solid labor market, it could also put upward pressure on inflation. That’s what the Fed is desperately trying to cut by raising benchmark rates to the highest level since 2007.

A separate report said mid-Atlantic manufacturing continues to weaken, though not as much as economists had expected.

Cisco Systems stock fluctuated between small gains and losses throughout the day after reporting stronger-than-expected final quarter results and raising its current quarter forecast. Analysts said some investors may be disappointed due to concerns about lower-than-expected growth in the next fiscal year. The stock ended with a gain of 1.2%.

Most companies in the S&P 500 reported higher earnings for the first three months of the year than analysts had expected. But according to FactSet, they are still on track to report weaker earnings for the second quarter in a row than a year earlier.

All told, the S&P 500 gained 39.28 points to 4,198.05. The Dow Jones rose 115.14 to 33,535.91 and the Nasdaq rose 188.27 to 12,688.84.

On foreign markets, indices rose across much of Europe and Asia after Wall Street’s rally spread west from Wednesday. That lift came after President Joe Biden said he is confident in striking a deal with the Republicans to allow the US government to increase its credit limit and borrow more.

That could prevent a possible first-ever default on Washington’s debt. The government is slated to run out of money to pay its bills from June 1 unless a deal is struck, and economists say a US federal default could have catastrophic consequences for financial markets and the economy.

In Asia, Japan’s Nikkei 225 rose 1.6% to continue a strong recent run, while Europe’s German DAX returned 1.3%.