S&P 500 Rises After Amazon Earnings, Jobs Report

The Dow Jones Industrial Average slipped by 21.42 points, or 0.1%, to end at 35089.74. The index of blue-chip stocks was down more than 300 points earlier in the day.

Even with the Dow’s small loss, all three indexes finished higher for the week, extending their weekly winning streak to two. The Nasdaq notched a weekly gain of 2.4%, its largest weekly gain since late December. The S&P 500 rose 1.5% during the period, while the Dow gained 1%.

Last month, major indexes tumbled for a stretch of weeks as concerns flared about the path of monetary tightening by the Federal Reserve. The central bank last week signaled that it would begin raising rates in mid-March.

This week’s gains, though, were hard-won. On Thursday, major indexes sank, dragged down by technology companies after Meta Platforms posted disappointing earnings results. The tumble by major indexes seemed to threaten to kick-start a selloff in the U.S. stock market again.

By Friday afternoon, however, sentiment had largely turned positive, shaking off concerns earlier in the day that the latest jobs report could support more hawkish Fed action. The Labor Department said Friday that the U.S. economy added 467,000 jobs in January. Economists surveyed by The Wall Street Journal had expected a gain of 150,000.

Central bank officials have in recent days played down speculation that they might raise interest rates by a half percentage point in March instead of a quarter point. But they have also said that their rate increases will be guided by data.

“Markets were afraid the Fed would raise rates at a time when the economy was rolling over and there were worries about policy errors,” said Jamie Cox, managing partner for Harris Financial Group. “What data like [Friday’s jobs report] suggests is that the Fed is adjusting monetary policy to adapt to the economy. Hyper-accomodative monetary policy is no longer needed.”

Major indexes enjoyed support Friday from a rise in the shares of big technology stocks including Microsoft and Tesla. With its 14% jump, Amazon broke the record for the largest-ever one-day gain in market value for a U.S. company. The stock ultimately added $375.88 to close at $3,152.79.

Meta, however, fell by 67 cents, or 0.3%, to close at $237.09, a day after it tumbled 26% following a disappointing earnings report.

Sharp moves in the share prices of large technology and social-media companies have an outsize impact on broader indexes. Amazon had a 3.3% weighting on the S&P 500 as of Wednesday, according to data from S&P Dow Jones Indices. Meta had a 2% weighting. 

Financials and energy stocks also finished solidly higher. Oil prices climbed, with global benchmark Brent crude rising 2.4% Friday to $93.27 a barrel, due to supply tightness and a winter storm in the U.S. that may disrupt production.

Snap shares surged 59%, adding $14.41, to end at $38.91 after the social-media company posted its first quarterly profit. Pinterest rose by $2.74, or 11%, to close at $27.25 after it reported its first full-year profit and more than $2 billion in annual revenue.

Clorox shares lost $23.93, or 14%, to close at $141.41 after the maker of disinfectant wipes and other cleaning products reported earnings that missed analysts’ expectations and said margins would take a steep hit from continued cost pressures. Ford Motor shares lost $1.93, or 9.7%, to finish at $17.96 after the auto maker posted earnings that fell short of Wall Street forecasts.

“Those companies which have continued to deliver strong results have held up relatively well,” said Mike Bell, global market strategist at J.P. Morgan Asset Management. “Those companies which were priced as heavily valued growth stocks, but then under-delivered, are getting hit extraordinarily hard.” 

In the bond market, the benchmark 10-year U.S. Treasury yield climbed to 1.930%, versus 1.825% Thursday, marking the highest yield since December 2019. Yields and prices move inversely.

Bitcoin was up about 10% from its 5 p.m. ET level Thursday. It climbed $3,683.72 to $40,647.24, rising above $40,000 for the first time since late January.

International markets have been volatile in recent weeks, and on Friday, the pan-continental Stoxx Europe 600 fell 1.4%. It lost 0.7% for the week. Markets have been rattled by the increasingly hawkish tone from global central banks. On Thursday, the Bank of England raised borrowing costs again, while the European Central Bank kept its key interest rates unchanged, but signaled concern about inflation and opened the door to a possible rate rise this year.

Even with solid weekly gains for major indexes, many investors expect choppiness won’t subside in the near future. The market volatility could continue until the Fed implements its first interest-rate increase and investors get used to the idea of rising rates, said Peter Andersen, founder of Massachusetts-based investment firm Andersen Capital Management. 

“The fact that everything is sold off wholesale is really, in my opinion, a buying opportunity,” Mr. Andersen said. “Every investor is so spooked now, and nobody really has a compass to figure out where exactly we are in this cycle.”

In Asia, stocks in Hong Kong resumed trading Friday following a three-day holiday closure. The Hang Seng Index added 3.2% and Japan’s Nikkei 225 index rose 0.7% for the day.

—Dave Sebastian contributed to this article.

Write to Caitlin McCabe at [email protected] and Caitlin Ostroff at [email protected]