(AP) -- Stocks rose in morning trading on Wall Street Thursday as markets settle down following several days of whiplash moves both up and down.
Investors were encouraged to see strong figures for U.S. economic growth, which showed the biggest climb in GDP last year since 1984. Markets are still processing the latest indications from the Federal Reserve a day earlier that the central bank is increasingly concerned about inflation and plans to raise interest rates and take other steps soon to fight it.
The S&P 500 index rose 1.7% as of 10:15 a.m. Eastern. More than 90% of stocks within the benchmark index made gains and it is now in the green for the week.
The Dow Jones Industrial Average rose 575 points, or 1.7%, to 34,754 and the Nasdaq rose 1.6%.
Technology stocks led the gains as investors felt comfortable shifting money into areas of the market with higher risks. Technology heavyweight Microsoft rose 3.2% and iPhone maker Apple rose 2.5%.
Banks, communications companies and industrial firms also made solid gains. Utilities and real estate companies, which are considered less risky, lagged behind.
Bond yields fell. The yield on the 10-year Treasury fell to 1.80% from 1.84%.
The U.S. economy expanded 5.7% in 2021, the strongest calendar-year growth since a 7.2% surge in 1984 after a previous recession. It ended the year by growing at an unexpectedly brisk 6.9% annual pace from October through December as businesses replenished their inventories, the Commerce Department reported.
The upbeat report came a day after the Federal Reserve raised some concerns about how quickly it will ease support for markets and the economy. It said it "expects it will soon be appropriate" to raise interest rates, and investors expect the first in a series of rate hikes to happen in March. The Fed also said it would phase out its monthly bond purchases, which have been intended to lower longer-term rates, in March.
The Fed has been monitoring the impact of inflation on businesses and consumers and Fed Chair Jerome Powell acknowledged that the pressure isn't lessening. That could mean the central bank has to take an even more aggressive approach to raising interest rates and removing the support it put in place for markets.
Businesses from a wide range of industries have been warning investors for months that supply chain problems and higher raw materials costs have hurt operations. Higher prices being passed on to consumers could prompt a spending pullback and hurt economic growth.
Investors are closely watching the latest round of corporate earnings to gauge just how much companies are getting hurt by inflation and how they expect it to impact them moving forward.
The technology sector has been hit particularly hard by supply chain problems with a longstanding computer chip shortage. Semiconductor equipment maker Lam Research fell 3.4% after saying supply chain issues worsened in December. Chipmaker Intel fell 5.9% after giving investors a weak profit forecast.
The chip shortage continues to hurt the auto industry. Tesla fell 4.7% after telling investors that the shortage will stop the company from rolling out new models in 2022.
Solid earnings did help push shares for many other companies higher. ServiceNow rose 12.7% after the maker of software that automates companies' technology operations reported strong financial results. Electronic storage maker Seagate Technology rose 19.4% and jeans maker Levi Strauss rose 12% after also reporting encouraging financial results.