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Wall Street opens gingerly higher at end of a brutal week

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NEW YORK (AP) — Stocks are opening gingerly higher on Wall Street Friday at the end of a brutal week. Stocks suffered several massive drops this week as markets get accustomed to the bitter medicine of higher interest rates that the Federal Reserve and other central banks are using in their battle against inflation. Higher rates fight inflation but they also slow down the economy and can push prices lower for stocks and bonds. The S&P 500 rose 0.8% in the early going, but it’s still down more than 5% for the week. The Dow was up 0.6% while gains for tech companies pushed the Nasdaq up 1.4%.

London, Frankfurt, Shanghai and Hong Kong advanced. Tokyo retreated. Oil prices rose to stay close to $120 per barrel.

Wall Street's S&P 500 index lost 3.3% on Thursday and other major benchmarks also sank after Britain's central bank followed the Federal Reserve in raising its key rate. Central banks in Switzerland and Taiwan also raised rates.

Investors worry the moves to control inflation that is running at four-decade highs might tip the U.S. and other major economies into recession.

“Pain is being inflicted almost everywhere and sharing doesn’t make it better in any way,” said Tan Boon Heng of Mizuho Bank in a report.

Along with raising rates, some of the trillions of dollars of bonds bought by the Fed to inject money into the U.S. financial system during the pandemic are being allowed to roll of its balance sheet. That should put upward pressure on market interest rates.

Fewer American workers filed for unemployment benefits last week than a week before. But more signs of trouble have been emerging.

President Joe Biden told The Associated Press on Thursday he saw reasons for optimism.

A recession is “not inevitable,” Biden said.

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