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Dow set to snap 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

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Indexes up: Dow 0.18%, S&P 0.77%, Nasdaq 1.21%

(Updated at 2:10 p.m. ET/1810 GMT)

By Chuck Mikolajczak

NEW YORK, May 24 (Reuters) -

U.S. stocks rose on Friday, recovering some losses suffered

in the prior session as data showed improving consumer sentiment

on inflation, to put the Nasdaq and S&P 500 on track for a fifth

straight weekly gain.

However, the Dow was set to snap its five-week

rally a day after registering its largest daily percentage

decline in over a year.

The Nasdaq jumped more than 1% on the day.

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."

The Dow Jones Industrial Average rose 72.07

points, or 0.18%, to 39,137.33, the S&P 500 gained 40.81

points, or 0.77%, at 5,308.65 and the Nasdaq Composite

climbed 202.76 points, or 1.21%, to 16,938.79.

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

interest-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 1.43% as the day's

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

, consumer discretionary and utilities

each gained around 1%.

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

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 0.96% after

tumbling 1.6% on Thursday.

Workday fell 14.93% after the human resources

software provider cut its annual subscription revenue forecast.

Ross Stores ( ROST ) rallied 8.5% 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.

Advancing issues outnumbered decliners by a 3.01-to-1 ratio

on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and five new

lows, while the Nasdaq Composite recorded 58 new highs and 101

new lows.