US STOCKS-Wall St jumps as jobs, services data calm rate hike worries
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By Ankika Biswas and Shubham Batra
Jan 6 (Reuters) - Wall Street's main indexes rallied on Friday as data that showed cooling wages and a contraction in U.S. services activity eased worries over the Federal Reserve's rate-hike trajectory.
The payrolls rose by 223,000 jobs in December, data from the Labor Department, while a 0.3% rise in average earnings was smaller than expected and lower than the previous month.
The for November were revised to show payrolls rose by 256,000 and average earnings grew by 0.4%.
Another set of data showedcontracted for the first time in more than 2-1/2 years in December amid weakening demand, with more signs of inflation easing.
"These are all the signs that show that Fed's policy is working," said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office in New York.
"That is what investors are relieved to see because it shows that they are going to have to become much more restrictive than they have."
Big technology and other growth stocks such as Apple Inc AAPL.O and Meta Platforms Inc META.O rose around 2% each, boosted by a decline in the 10-year U.S. Treasury yield. US10YT=RR
A resilient labor market has powered the economy through consumer spending, but could prompt the Fed to lift its target interest rate above the 5.1% peak it had projected last month and keep it there for a while.
Money market participants see 75% chance that the U.S. central bank will raise the benchmark rate by 25-basis point in February and keep the terminal rate just below 5% by June. FEDWATCH
Also aiding sentiment were Fed officials acknowledging cooling wage growth and other signs of the economy gradually slowing, with Atlanta President Raphael Bostic hinting at the chances of aat the policy meeting.
At 12:11 a.m. ET, the Dow Jones Industrial Average .DJI was up 601.66 points, or 1.83%, at 33,531.74, the S&P 500 .SPX was up 69.18 points, or 1.82%, at 3,877.28, and the Nasdaq Composite .IXIC was up 187.11 points, or 1.82%, at 10,492.35.
All the major S&P 500 indexes gained, led by consumer staples .SPLRCS, which rose 6.6% on boost from Costco Wholesale Corp COST.O after the membership-only retail chain reported strong sales growth in December.
Pfizer Inc PFE.N advanced 2.5% on of talks with China to secure a license that will allow domestic drugmakers to manufacture and distribute a generic version of the U.S. firm's COVID-19 antiviral drug Paxlovid in China.
Bed Bath & Beyond Inc BBBY.O slid 20.4% after Reuters reported that the home goods retailer was preparing to in coming weeks.
Advancing issues outnumbered decliners by a 7.02-to-1 ratio on the NYSE and 2.61-to-1 ratio on the Nasdaq.
The S&P index recorded 16 52-week highs and five lows, while the Nasdaq recorded 65 highs and 59 lows.
(Reporting by Shubham Batra, Ankika Biswas and Shashwat Chauhan in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)