By Corrie Driebusch and Riva Gold 

U.S. stocks climbed Friday to notch their fourth consecutive week of gains as the fears of an economic slowdown that gripped markets in December seem to have subsided.

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 earlier worried that the Fed's pace of interest-rate increases could jolt an economy on shaky footing.

The four-week winning streak by the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite is their biggest on a percentage basis since October 2011. The blue-chip index has rebounded 13% since bottoming out on Christmas Eve and suffering its worst December since 1931.

"Investor sentiment has really improved from the turmoil just before Christmas," said Brian Jacobsen, a senior multisector strategist at Wells Fargo Asset Management, adding "we almost got a do-over" since then as investors have jumped back into the market at improved valuations.

The stock market is still in a tenuous position, though. Investors will be watching for any incremental updates in the trade talks between the U.S. and China in the coming weeks. Similarly, the partial government shutdown could rattle the U.S. economy, a factor New York Federal Reserve President John Williams addressed in a speech Friday. And economic data remains uneven: An index of U.S. consumer sentiment fell to its lowest level in more than two years in January, the University of Michigan said Friday.

The Dow industrials rose 336.25 points, or 1.4%, to 24706.32 on Friday, bringing their gains over the past four weeks to more than 2,250 points, or 10%.

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%, though they are down at least 7.5% from last year's highs.

The market rebound has been broad, with all 11 sectors in the S&P 500 up for the year, while major stock indexes in Europe, China and Japan have all risen at least 3%.

Other assets have also risen in lockstep. U.S.-traded crude oil has rallied for three consecutive weeks, up 27% from its late-December low to $53.80 a barrel. Meanwhile, the yield on the benchmark 10-year U.S. Treasury note, which often is factored into mortgage rates and other consumer borrowing, has risen in nine of the past 11 sessions.

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 mitigated investor worries about an economic slowdown. Later that 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.

Signs of easing trade tensions between the U.S. and China have also helped. 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 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 talks 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. After UnitedHealth Group, the nation's largest health insurer reported higher sales Tuesday, its shares rose more than 3%. Bank of America's stock jumped over 7% Wednesday as its fourth-quarter earnings rose sharply, helped by rising interest rates and lower taxes.

Slightly more companies than usual have been beating analysts' earnings estimates for the fourth quarter, according to data from Refinitiv. The bar is significantly lower, however, after steep downgrades to fourth-quarter and 2019 earnings forecasts in recent weeks.

Bond prices have also climbed 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. Yields fall when bond prices rise.

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 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 18:56 ET (23:56 GMT)