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Financial Markets                      05/24 15:33

   

   NEW YORK (AP) -- U.S. stocks rose Friday in a bounce back from Wall Street's 
worst day since April.

   The S&P 500 gained 36.88 points, or 0.7%, to 5,304.72 and won back all its 
losses from the prior two days. It eked out a tiny gain for the week, enough to 
extend its weekly winning streak to five, and is sitting just below its record 
set on Tuesday.

   The Dow Jones Industrial Average rose 4.33 points, or less than 0.1%, to 
39,069.59, and the Nasdaq composite gained 184.76, or 1.1%, to 16,920.79 and 
topped its all-time high set earlier this week.

   Deckers Outdoor jumped 14.2% for the biggest gain in the S&P 500 after 
reporting stronger profit and revenue for the latest quarter than expected. The 
company behind the Hoka, Ugg and Teva brands also gave a forecast for revenue 
this upcoming fiscal year that was in line with analysts' expectations.

   Ross Stores also lifted the market after leaping 7.8%. The retailer reported 
better profit for the latest quarter than analysts expected. That was despite 
its revenue only edging past expectations, as customers continue to hold back 
on purchases of non-essentials.

   CEO Barbara Rentler said several challenges, "including prolonged inflation, 
continue to squeeze our low-to-moderate income customers' purchasing power."

   Even though data on the overall, or macro, economy has been showing 
continued strength for spending by U.S. households, the numbers underneath the 
surface may not be as encouraging.

   "Walmart and Target are telling us that high income consumers are doing 
fine, but beginning to trade down," said Brian Jacobsen, chief economist at 
Annex Wealth Management. "The lower income consumer is struggling. Macro often 
focuses too much on the average and the average is skewed by the high-end 
household."

   The market got a bit of a boost Friday from a report showing overall 
sentiment among U.S. consumers weakened by less in May than preliminary data 
had suggested. Perhaps more importantly, the report from the University of 
Michigan also said U.S. consumers' expectations for inflation in the coming 
year rose by less in May than earlier feared.

   That could help stave off a vicious cycle where high expectations for 
inflation among U.S. households drive them to behave in ways that only make 
inflation worse.

   Worries about stubbornly high inflation were behind this week's rocky 
trading, after indexes set records recently. The weakness began after the 
Federal Reserve on Wednesday released the minutes from its last policy meeting. 
It showed some officials talking about the possibility of raising rates if 
inflation worsens.

   Stocks fell further after reports on Thursday indicated the U.S. economy is 
stronger than expected. Such strength can actually spook Wall Street because it 
could keep upward pressure on inflation.

   That in turn could at least delay the Federal Reserve from giving relief to 
financial markets through cuts to its main interest rate, which is sitting at 
the highest level in more than 20 years. The Fed is trying to pull of the 
difficult feat of slowing the economy enough through high interest rates to 
stifle high inflation but not so much that it kneecaps the job market.

   Goldman Sachs economist David Mericle pushed back his forecast for the Fed's 
first cut to rates to September from July, in part due to Thursday's reports on 
U.S. business activity and joblessness.

   Treasury yields climbed this week on such concerns, but they were mostly 
stable Friday following the report on consumer sentiment. The yield on the 
10-year Treasury slipped to 4.46% from 4.48% late Thursday. The two-year yield, 
which more closely tracks expectations for action by the Fed, was holding 
steady at 4.94%.

   This week's bumpiness for stocks came despite another blowout profit report 
from Nvidia, which has rocketed to become one of Wall Street's most influential 
stocks amid a frenzy around artificial-intelligence technology. Fervor around 
AI had pushed some stocks to heights that critics called overdone, but Nvidia's 
eye-popping growth and forecasts for more suggest it could keep going.

   Nvidia rose another 2.6% Friday, making it the biggest single force pushing 
the S&P 500 upward.

   Elsewhere on Wall Street, Workday fell 15.3% despite reporting stronger 
profit for the latest quarter than analysts expected. The company, which helps 
businesses manage their people and money, gave a forecast for upcoming 
subscription revenue that fell a bit short of Wall Street's estimates.

   In stock markets abroad, indexes fell across much of Asia and Europe. 
Indexes sank 1.4% in Hong Kong, 1.3% in Seoul and 1.2% in Tokyo.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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