Financial Markets                      09/11 15:37

   

   NEW YORK (AP) -- U.S. stocks rebounded Friday and regained much of their 
losses for the week after oil prices eased off their recent spurt. An update on 
inflation across the United States that came in close to economists' 
expectations, even if prices are still rising too quickly for everyone's 
liking, also helped calm the market.

   The S&P 500 climbed 0.9% and snapped a four-day losing streak, its longest 
since June. The Dow Jones Industrial Average jumped 509 points, or 1%, and the 
Nasdaq composite rose 1%.

   They got help from a pullback in oil prices, which had jumped to their 
highest levels since May because of the ongoing war with Iran. The price for a 
barrel of Brent crude, the international standard, fell 2.8% to settle at 
$104.61 after getting near $110 overnight.

   That took a bit of pressure off inflation, which remains stubbornly high. A 
report on Friday showed that U.S. consumers had to pay prices for gasoline, 
food and other costs of living that were 3.4% higher last month than a year 
earlier.

   While still high, that was close to what economists expected and what Wall 
Street was prepared for. The data also strengthened expectations among traders 
that the Federal Reserve will feel compelled to hike its main interest rate at 
its meeting next week.

   Such moves are the typical way the Fed tries to rein in high inflation, and 
they work by filtering through the bond market, making it more expensive for 
everyone to borrow money, slowing the economy and hopefully removing fuel for 
further inflation.

   The rising expectations for an upcoming hike to rates drove up the yield of 
the two-year Treasury, which moves with guesses for upcoming Fed action, to 
4.62% from 4.56% late Thursday.

   Longer-term Treasury yields held steadier, though. That could be a signal 
that investors in the bond market see upcoming hikes by the Fed as helping to 
keep control of inflation over the longer term. The yield on the 10-year 
Treasury rose more modestly to 4.97% from 4.95% late Thursday, while the 
30-year yield eased to 5.36% from 5.37%.

   Economists say hikes could quiet questions about the Fed's commitment to 
keeping inflation under control. Worries had risen earlier in the summer about 
its credibility and whether it would do what's needed to bring inflation down, 
even if it causes pain for the economy in the near term.

   Federal Reserve Chairman Kevin Warsh has been adamant about not giving hints 
about where the Fed may take interest rates, though he did calm some concerns 
among investors at a speech late last month. President Donald Trump, meanwhile, 
has been pushing for interest rates to go lower rather than higher.

   "Symbolism can trump substance, even when it comes to monetary policy," 
according to Brian Jacobsen, chief economic strategist at Annex Wealth 
Management.

   It's all coming at a moment when confidence among Americans continues to 
sour. A preliminary report from the University of Michigan on Friday said U.S. 
consumer sentiment is falling, with declines for both Democrats and Republicans.

   Their expectations for inflation coming in the year ahead jumped to 4.6% 
from 4% last month. That's the highest reading since June, and it's concerning 
for the Fed and for economists because it can trigger a vicious cycle of 
behavior that worsens inflation.

   On Wall Street, Kroger rose 2.7% after the grocer reported a stronger profit 
for the latest quarter than analysts expected. It also held firm on its 
forecast for profit over the fiscal year, even though it trimmed its forecast 
for an important underlying measure of revenue growth.

   ACV Auctions, whose digital marketplace connects wholesale buyers and 
sellers of vehicles, soared 44.2% after Copart said it would pay $10.50 in cash 
for each of the company's shares. Copart, whose online vehicle auctions sold 
more than 4 million units in the last year, fell 2.6%.

   An early jump for Oracle faded as trading progressed after the tech giant 
reported stronger profit and revenue for the latest quarter than analysts 
expected. After initially leaping 8.5%, its stock swiveled between gains and 
losses and finished with a loss of 1.7%.

   Stocks closely tied to the artificial-intelligence industry broadly became 
shaky this summer on worries that the AI frenzy may have sent prices too high.

   All told, the S&P 500 rose 65.28 points to 7,656.98. The Dow Jones 
Industrial Average added 509.19 to 52,573.29, and the Nasdaq composite climbed 
251.31 to 26,333.04.

   In stock markets abroad, indexes rose in Europe as oil prices eased. 
London's FTSE 100 added 0.4% after a report said the U.K. economy was stronger 
in July than economists expected.

   Stock markets were weaker in Asia, where Japan's Nikkei 225 lost 1.9% and 
South Korea's Kospi fell 1.8%.

   ___

   AP Business Writers Chan Ho-him and Michelle Chapman contributed to this 
report.

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