S&P, Nasdaq Bounce Back After Amazon Earnings, Jobs Report

The Dow Jones Industrial Average added about 210 points, or 0.6%. Earlier in the day, the index of blue-chip stocks fell more than 300 points.

Friday’s gains put all three indexes on track to notch gains for the week of about 1[ads1].7% or more, extending their weekly winning streak to two. 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 start raising rates in mid-March.

The 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 US stock market again.

By Friday afternoon, however, investment sentiment had turned solidly 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 US 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-accommodative monetary policy is no longer needed. “

Major indices enjoyed support Friday from a rise in the shares of big technology stocks. In addition to Amazon, Meta added 0.6%, a day after the tech giant tumbled 26% after 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 the S&P Dow Jones Indices. Meta had a 2% weighting.

Financials and energy stocks also traded solidly higher. Oil prices climbed, with global benchmark Brent crude up 2.4% at $ 93.27 a barrel, due to supply tightness and a winter storm in the US that may disrupt production.

Snap shares surged 59% after the social-media company posted its first quarterly profit. Pinterest rose 10% after it reported its first full-year profit and more than $ 2 billion in annual revenue.

Clorox shares tumbled 14% 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 declined 9.8% after the auto maker posted earnings that fell short of Wall Street forecasts.

“Those companies that have continued to deliver strong results have held up relatively well,” said Mike Bell, global market strategist at JP 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 10-year US Treasury yield benchmark topped 1.9% for the first time since before Covid-19 became a major concern for investors. It recently climbed to 1.924%, versus 1.825% Thursday. Yields and prices move inversely.

Bitcoin climbed more than 9% from its 5 pm ET level Thursday, according to CoinDesk, 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 indices, many investors expect choppiness will not 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%, led by gains in banking and technology stocks. Japan’s Nikkei 225 index rose 0.7%.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com, Caitlin Ostroff at caitlin.ostroff@wsj.com and Dave Sebastian at dave.sebastian@wsj.com.