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Dow snaps five-week win streak

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Workday falls after cutting revenue forecast

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Ross Stores ( ROST ) rises after Q1 results beat

(Updated at 4:00 p.m. ET/2000 GMT)

By Chuck Mikolajczak

NEW YORK, May 24 (Reuters) -

U.S. stocks rebounded on Friday from sharp losses the day

before on news of an improving consumer outlook on inflation,

sending the Nasdaq to a fifth straight week of gains and record

closing high.

The Commerce Department said new orders for key

U.S.-manufactured capital goods

rebounded

more than expected in April while the University of

Michigan reported that consumers' inflation expectations

improved in late May after deteriorating early in the month.

"The data has come in a little better than people

thought this morning. Durable goods was a pretty solid number.

... And then consumer sentiment, not great, but not bad, better

than people expected," said Rob Haworth, senior investment

strategist at U.S. Bank Wealth Management in Seattle.

"This is a bounce where people are like maybe things

aren't as bad as we thought, maybe there's room for the Fed to

cut rates and the economy's going to be OK, and we're not

completely falling apart."

According to preliminary data, the S&P 500

gained 36.86 points, or 0.70%, to end at 5,304.70 points,

while the Nasdaq Composite gained 184.98 points, or

1.11%, to 16,921.02. The Dow Jones Industrial Average

rose 6.19 points, or 0.02%, to 39,071.45.

Despite Friday's gains, the Dow snapped its five-week

rally a day after registering its largest daily percentage

decline in over a year.

Trading volumes were subdued ahead of the Memorial Day

market holiday on Monday.

U.S. stocks dropped on Thursday as economic data

indicating rising price pressures tempered expectations for rate

cuts this year from the Federal Reserve. This overshadowed

Nvidia's ( NVDA ) blowout quarterly results that helped justify

investor expectations for growth in artificial intelligence

related stocks.

Communication services gained more than 1% as the

day's best performing of the 11 major S&P sectors, while tech

and utilities each gained around 1%.

Markets are pricing in a 49.4% chance for a rate cut at the

Fed's September meeting, down from 54.8% a week ago, CME's

FedWatch Tool showed. Goldman Sachs ( GS ) pushed back its call for a

first easing to September from July.

Small-cap stocks, sensitive to interest rates, also

rebounded, with the Russell 2000 rising after tumbling

1.6% on Thursday.

Workday plunged after the human resources software

provider cut its annual subscription revenue forecast.

Ross Stores ( ROST ) rallied after posting first-quarter

results above estimates and raising its annual profit forecast.

With earnings season largely wrapped up, LSEG data through

Friday morning showed that of the 480 companies in the S&P 500

that have reported earnings, 77.9% have topped analysts'

expectations, just shy of the 79% beat rate over the past four

quarters but above the 67% average since 1994.