U.S. stocks were trading sharply higher Friday, with the Dow recovering some ground after a five-day streak of declines, as hopes rose for a debt ceiling deal in Congress and economic data offered encouraging readings on the strength of the American consumer and manufacturing even if inflation remained elevated.What’s happening
The Dow Jones Industrial Average
DJIA,
+0.87%
was up 296 points, or 0.9%, to 33,061.
The S&P 500
SPX,
+1.09%
gained 42 points, or 1%, to 4,193.
The Nasdaq Composite
COMP,
+1.86%
rose by 200 points, or 1.6%, to 12,902.
On Thursday, the Nasdaq Composite posted its biggest gain in three weeks thanks to a historic rally in shares of chipmaking giant Nvidia Corp. The Dow Jones Industrial Average, meanwhile, finished lower for the fifth straight session.
What’s driving markets Reports suggesting that Congress was close to a deal to raise the U.S. debt ceiling also helped sentiment, though House Republicans have already left Washington ahead of the U.S. Memorial Day holiday weekend. While Treasury Secretary Janet Yellen says the U.S. could run out of money as early as June 1, other projections estimate the federal government may have until the middle of the month. “I think we’ll all be able to exhale by mid-June, although it will likely be an increasingly volatile market environment between now and then,” said Kristina Hooper, chief global market strategist at Invesco. “Once that drama recedes, I think all eyes will be back on central banks.” A raft of encouraging U.S. economic data helped catapult U.S. stocks higher early Friday, as the blue-chip Dow unwound some of its losses from earlier in the week that had been driven in part by recession fears. PCE data also showed consumer spending sprang back to life in April, rising 0.8%, the largest gain in three months, surpassing expectations for a 0.5% increase as Americans bought more cars and spent more on services. Durable-goods data showed orders for U.S. manufactured goods jumped 1.1% in April. The gain was largely driven by military spending, but business investment rose sharply as well. At the same time, the PCE price index showed core inflation rose 0.4% in April, more than the 0.3% increase that economists had expected. Core inflation strips out volatile food and energy prices. The yearly increase in prices rose to 4.4% from 4.2% …
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