By Corrie Driebusch and Riva Gold 

U.S. stocks climbed Friday, notching their fourth consecutive week of gains, as the fears of an economic slowdown that gripped markets in December have subsided in the new year.

Data showing a healthy labor market, as well as signals from central bankers that the Federal Reserve will be flexible with monetary policy, have offered relief to investors who were spooked late last year that the Fed's pace of interest-rate increases could jolt an economy on shaky footing.

Investors received their latest reassurance on Friday when New York Fed President John Williams said interest-rate and balance-sheet adjustments will depend on the economy's performance.

The Dow Jones Industrial Average rose 336.25 points, or 1.4%, to 24706.32, while the S&P 500 added 34.75 points, or 1.3%, to 2670.71 and the Nasdaq Composite added 72.76 points, or 1%, to 7157.23. All three indexes ended the week up more than 2.5% and with gains of at least 10% since bottoming on Christmas Eve.

"Investor sentiment has really improved from the turmoil just before Christmas," said Brian Jacobsen, multisector strategist at Wells Fargo Asset Management. Some economic data appeared to signal softening in the economy, he said, adding that "we almost got a do-over" since then as investors have jumped back into the market at improved valuations.

The New Year rally kicked off Jan. 4, when U.S. stocks bounced back from their worst two-day start to the year since 2000. A stronger-than-expected December jobs report showed employers added more than 300,000 jobs last month, mitigating investor worries about an economic slowdown. Later that same day, Fed Chairman Jerome Powell said economic data showed good momentum heading into 2019, but the central bank was "prepared to adjust policy quickly and flexibly," if necessary. The Dow industrials soared more than 3% that day. Since then, the blue-chip index has risen in all but two sessions.

Adding to the recent gains have been signs of easing trade tensions between the U.S. and China and a batch of upbeat quarterly results from U.S. companies.

Trade friction had weighed down market sentiment in recent months amid concerns about its impact on economic growth and corporate supply chains. A Federal Reserve report this week showed firms said they were struggling with higher input prices, partly because of tariffs.

But The Wall Street Journal reported Thursday that U.S. Treasury Secretary Steven Mnuchin proposed lifting some or all tariffs on Chinese imports to advance trade talks. A Treasury spokesman said in response that bargaining positions "are all at the discussion stage."

Kevin Gardiner, global investment strategist at Rothschild Wealth Management, said it is less clear longer term whether the outcome of the trade negotiations will be good or bad for the U.S. economy. But "anything which makes international trade more difficult -- that puts sand in the wheels of businesses and disrupts their increasingly global supply chains -- has got to be bad for business," he said.

Corporate earnings have also been a source of support for the market this week and continued to drive moves in individual companies. UnitedHealth Group shares rose more than 3% Tuesday after the parent of the nation's largest health insurer said its sales rose in the fourth quarter. Bank of America's stock jumped more than 7% Wednesday as its fourth-quarter earnings rose sharply, helped by rising interest rates and lower taxes.

On Friday, SunTrust Banks was a big gainer, rising 4.6% after it reported an increase in revenue and a drop in costs.

Overall, slightly more companies than usual have been beating analysts' earnings estimates for the fourth quarter, according to data from Refinitiv.

That comes against a significantly lowered bar, however, following steep downgrades to fourth-quarter and 2019 earnings forecasts in recent weeks.

Still, the better-than-expected earnings have helped lift shares broadly. All 11 sectors of the S&P 500 are up in 2019.

Major indexes around the world are also off to a strong start for the year. The Stoxx Europe 600 gained 2.2% the past week, putting its 2019 gain at 5.7%. Major indexes in Japan and China are also higher for the year.

The rebound has extended beyond stocks. The price of U.S.-traded oil has risen 19% so far this year to $53.80 a barrel, a sharp reversal from its late-2018 declines.

The price of bonds have also climbed higher in recent weeks. The average yield premium that investors demand to hold speculative-grade U.S. corporate bonds has dropped sharply to 4.36 percentage points, from 5.37 percentage points on Jan. 3, the day before Mr. Powell's remarks at the Atlanta conference, according to Bloomberg Barclays data.

After a record stretch of no speculative-grade bonds being sold, the spigot of new debt has begun to open up, with four companies selling a total of $3.2 billion after midstream energy company Targa Resources Partners LP broke the dry spell on Jan. 10 with a $1.5 billion offering.

Daniel Kruger and Sam Goldfarb contributed to this article.

Write to Corrie Driebusch at corrie.driebusch@wsj.com and Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

January 18, 2019 16:41 ET (21:41 GMT)