Stocks rally as jobs report calms rate hike worries

STORY: U.S. stocks rallied on Friday after the December jobs report showed hiring rose more than expected but that wage growth slowed, both allaying investors' fears of a recession and tamping down worries about future interest rate hikes.

The Dow rose more than 2%, the S&P 500 gained more than two and a quarter, while the Nasdaq jumped more than two and a half percent.

The U.S. Labor Department's non-farm payrolls report showed 223,000 jobs were added last month, but lower-than-expected wage gains were welcomed by those seeking signs of slowing inflation.

Geetu Sharma, founder and investment manager at AlphasFuture, said it was the best sign yet that the Fed's plan to tame inflation without triggering a recession might work.

"We definitely had a good jobs report. We not only have a strong labor market, wage growth is less than expected, although I think it's still kind of high, so it's not that we are seeing much decline in inflation concerns but, on a relative basis, wage growth has come in lower than expected and that is raising the odds of a soft landing, if there are any."

As for individual stocks, Costco jumped more than 7% after the membership-only retailer reported strong December sales growth.

Shares of Pfizer rose 2.5% after reports of talks with China to secure a license that will allow domestic drugmakers to manufacture and distribute a generic version of its COVID-19 antiviral drug Paxlovid in China.

Megacap tech stocks, including Apple and Amazon, posted big gains on Friday after a rocky week.

But shares of Bed Bath & Beyond continued their downward slide, falling 22.5% to close at just $1.31 a share, after Reuters reported that the home goods retailer was preparing to seek bankruptcy protection in the coming weeks.