Stock market today: Wall Street resumes its rally after encouraging reports on inflation and profits

NEW YORK (AP) — Wall Street is back to climbing following more encouraging profit reports and the latest signal that inflation is loosening its chokehold on the economy. The S&P 500 was 0.7% higher in early trading Friday. The Dow was up 207, or 0.6%, after breaking a 13-day winning streak a day before. The Nasdaq composite was up 1.1%. Stocks have been rallying recently on hopes high inflation is cooling enough to get the Federal Reserve to stop hiking interest rates. A report on Friday said the inflation measure the Fed prefers to use slowed by a touch more than expected last month.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

BANGKOK (AP) — Shares in Europe and Asia were mixed on Friday after the Bank of Japan adjusted its bond purchase policy but kept its negative benchmark interest rate unchanged.

Paris, Frankfurt, Tokyo and Sydney fell while Hong Kong, London and Shanghai advanced. U.S. futures rose and oil prices fell.

Japan’s central bank opted to keep its benchmark interest rate at minus 0.1% at a policy meeting that ended Friday. But it adjusted its bond purchases to allow greater flexibility in yields, saying uncertainties for the economy and prices required a nimbler approach.

The yield on the 10-year Japanese government bond rose after the BOJ said it would offer to buy those at a 1% yield each business day, instead of the upper limit of 0.5% that was imposed under its “yield curve control program.”

The aim is still to keep long-term interest rates near zero percent, the central bank said.

Markets in Japan wobbled before Friday’s announcement. Afterward, Tokyo’s Nikkei 225 dipped more than 2% but in the end closed 0.4% lower, at 32,759.23. The dollar bounced against the Japanese yen but eventually fell to 139.39 from 139.49.

Shares in Japanese banks jumped. Mizuho Financial Group gained 4.8%; Mitsubishi UFG added 5.3% and Sumitomo Mitsui Financial Group surged 4.3%.

In early European trading, Germany’s DAX edged 0.1% lower to 16,394.51 and the CAC 40 in Paris declined 0.3% to 7,446.29. London’s FTSE 100 was up 0.2% at 7,704.75. Stocks climbed in Europe on Thursday after the European Central Bank raised interest rates.

The future for the S&P 500 gained 0.4% while that for the Dow Jones Industrial Average rose 0.2%. On Thursday, a Wall Street rally fizzled as the S&P 500 sank 0.6% after touching its highest level in nearly 16 months. The Dow industrials gave up 0.7%. The Nasdaq composite fell 0.5%.

In other Asian trading Friday, Australia’s S&P/ASX 200 declined 0.7% to 6,877.93.

The Shanghai Composite index jumped 1.8% to 3,275.93, while in Hong Kong the Hang Seng added 1.4% to 19,920.56. The Kospi in Seoul gained 0.2% to 2,608.32.

Markets in India and Thailand were closed for holidays.

Wall Street’s latest dip halted 13 straight days of gains for the Dow. Stocks have been roaring on hopes the Federal Reserve can pull off what earlier seemed like a long-shot bet: successfully pull down high inflation by raising interest rates without sending the economy into a painful recession.

But critics have been saying the market’s sharp move upward has been too much, too fast and that the seemingly growing consensus about a “soft landing” for the economy is hardly a certainty.

Reports about the economy on Thursday were mostly encouraging, but could also keep the pressure up on inflation. Strong data on the job market in particular could mean U.S. households will keep spending, encouraging companies to keep raising prices. That in turn could push the Federal Reserve to keep interest rates higher than expected, keeping alive the threat of a recession.

One estimate said growth for the overall economy accelerated in the spring. That easily topped forecasts from economists, who were expecting a slowdown from the first three months of the year. That report also suggested a measure of inflation wasn’t as high from April through June as expected.

Another report said fewer workers applied for jobless benefits last week. It’s the latest indication the job market remains remarkably solid, while a third report said orders for long-lasting manufactured goods strengthened more than expected last month.

The Federal Reserve raised its federal funds rate on Wednesday to its highest level in more than two decades in hopes of dragging inflation lower. High rates work by bluntly slowing the entire economy and hurting prices for stocks and other investments.

In other trading Friday, U.S. benchmark crude oil shed 24 cents to $79.85 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.31 on Thursday to $80.09 per barrel.

Brent crude, the pricing basis for international trading, declined 34 cents to $83.45 per barrel.

The euro slipped to $1.0976 from $1.0980.

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