NEW YORK (AP) 鈥� Stocks rallied into the close on Wall Street, pushing the S&P 500 up 0.9%, as several companies reported better-than-expected results. The Nasdaq composite led the market with a 1.5% gain Thursday, while the Dow Jones Industrial Average lagged with a gain of 0.3%. Bond yields rose after a Federal Reserve official cautioned the end to its interest-rate hikes may not come as soon as markets had hoped. That cooled hopes that June could mark the first time in more than a year where the Fed doesn鈥檛 raise rates. Walmart rose after its results beat expectations.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� Stocks are mostly drifting higher Thursday, while yields climbed after a Federal Reserve official cautioned the end to its interest-rate hikes may not arrive as soon as Wall Street hoped.
The S&P 500 was up 0.5% in late trading, adding to its rally from a day earlier as momentum seems to build for the U.S. government to avert a disastrous default on its debt. The Dow Jones Industrial Average slipped by 32 points, or 0.1%, to 33,388 with less than an hour left in trading, while the Nasdaq composite was 1% higher.
Helping to support Wall Street was , which rose 1.1% after reporting stronger results for the latest quarter than expected. It also raised its financial forecast for the full year, though it said it鈥檚 seeing shoppers remain cautious about spending.
Bath & Body Works, another retailer, leaped 9.4% after reporting stronger revenue and earnings for the latest quarter.
Much scrutiny has been on the retail industry because strong spending by U.S. households has been one of the main pillars keeping the slowing economy out of a recession.
Video game maker Take-Two Interactive jumped 12.7% after it forecast a huge jump in revenue for fiscal 2025, stoking speculation that Grand Theft Auto VI is on the way.
Stocks have remained remarkably resilient since early April despite a long list of worries. A major reason for that is hope the Fed would take it easier on its hikes to rates, which have slowed inflation at the expense of risking a recession and knocking down prices across financial markets.
The widespread bet was that the Fed would take a pause at its next meeting in June. But Dallas Fed President Lorie Logan cooled some of those hopes in a prepared speech for the Texas Bankers Association.
鈥淭he data in coming weeks could yet show that it is appropriate to skip a meeting,鈥� 鈥淎s of today, though, we aren鈥檛 there yet.鈥�
Treasury yields climbed as traders increased bets that the Fed would raise rates again at its June meeting, though the majority are still forecasting a pause.
The yield on the 10-year Treasury rose to 3.65% from 3.57% late Wednesday. The two-year yield, which moves more on expectations for the Fed, rose to 4.27% from 4.16%.
Higher rates have already slowed swaths of the economy and helped lead to three of the largest U.S. bank failures in history since March. Reports on the economy Thursday came in mixed.
One showed that fewer workers applied for last week than expected. While that's good news for workers and for a so-far solid job market, it could also result in upward pressure on inflation. That's what the Fed has been trying desperately to lower by cranking its benchmark interest rate to the highest level since 2007.
A separate report said that manufacturing in the mid-Atlantic region is continuing to weaken, though not quite as badly as economists expected.
Cisco Systems' stock was swinging between small gains and losses after reporting stronger results for the latest quarter than expected and raising its forecast for the current quarter. Analysts said some investors may be disappointed because of worries about lower-than-expected growth in the following fiscal year. Its stock was most recently 0.3% higher.
The majority of companies in the S&P 500 have reported stronger profits for the first three months of the year than analysts expected. But they're still on track to report a second straight quarter of weaker earnings than a year earlier, according to FactSet.
In stock markets abroad, indexes rose in much of Europe and Asia after a big Wall Street rally from Wednesday spread westward. That lift came after President Joe Biden said he's confident about reaching a deal with Republicans to allow the U.S. government to increase its credit limit and borrow more.
That could avert a potential first-ever default on Washington's debt. The government is scheduled to run out of cash to pay its bills as soon as June 1 unless a deal is made, and economists say a default could have catastrophic consequences across financial markets and the economy.
In Asia, Japan's Nikkei 225 rose 1.6% to continue a strong recent run, while Germany's DAX in Europe returned 1.3%.
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AP Business Writers Matt Ott and Joe McDonald contributed
Stan Choe, The Associated Press
