December 13, 2017
Friday, October 31, 2014

Dow, S&P 500 end at record highs; BOJ move adds fuel to rally

Bank of Japan (BOJ) Governor Haruhiko Kuroda speaks before the press at the BOJ headquarters in Tokyo.

The Dow and S&P 500 have ended at record highs and indexes posted strong gains for a second week after the Bank of Japan's surprise move to ramp up its stimulus program.

Major indexes also posted gains for the month, putting in a sharp recovery from their recent selloff that almost drove the S&P 500 into correction territory. The benchmark index is now up 8.4 percent from its October 15 low and up 9.2 percent for the year so far.

The Nasdaq finished for the day at its highest since March 2000, while for the week the Dow rose 3.5 percent, its best percentage weekly gain since January 2013. The S&P 500 posted its best two-week gain since December 2011.

Gains were broad, with the benchmark S&P 500 index posting 126 new 52-week highs and the Nasdaq recording 229 new highs. Shares of Exxon Mobil, up 2.4 percent at $96.71, and Chevron, up 2.3 percent at $1119.95, were among the biggest positives on the Dow and S&P 500 after they reported results.

The move by the Bank of Japan, whose board voted to accelerate purchases of Japanese government bonds while tripling its purchases of exchange-traded funds and real-estate investment trusts, comes just days after the Federal Reserve wound down its years-long package of incentives.

That could help the outlook for stocks, especially if the US economy keeps improving and earnings remain supportive.

The majority of S&P 500 companies are beating earnings expectations so far. With results in from 70 percent of companies, 75.8 percent are reporting earnings above analysts' expectations, according to Thomson Reuters data, well above the 63 percent average in the past 20 years.

The Dow Jones industrial average rose 195.1 points, or 1.13 percent, to 17,390.52, a record close. The Dow also hit an intraday record high of 17,395.54. The S&P 500 gained 23.4 points, or 1.17 percent, to 2,018.05, a record close. The Nasdaq Composite added 64.60 points, or 1.41 percent, to 4,630.74.

For the week, the S&P 500 was up 2.7 percent and the Nasdaq was up 3.3 percent. For the month, the Dow was up 2 percent, the S&P 500 was up 2.3 percent and the Nasdaq was up 3 percent.

About 8.1 billion shares changed hands on US exchanges, compared with the 7.8 billion average for the month to date, according to data from BATS Global Markets.

Advancing issues outnumbered declining ones on the NYSE by 2,363 to 717, for a 3.30-to-1 ratio on the upside; on the Nasdaq, 1,921 issues rose and 816 fell for a 2.35-to-1 ratio favoring advancers.

Meanwhile, European shares surged in early trade, tracking sharp gains in Tokyo after the Bank of Japan surprised global financial markets by easing policy further.

The FTSEurofirst 300 index of top European shares was up 1.3 percent at 1,345.04 points, extending its sharp two-week rally and tracking the Nikkei's 4.8 percent jump today.

BNP Paribas featured among the top blue-chip gainers, up 3 percent after France's No. 1 bank posted better-than-expected results, as gains in fixed income trading and in international retail offset a lacklustre economic environment in its core European markets.

Anheuser-Busch InBev bucked the trend, losing 2.6 percent after the world's largest beer maker reported a lower-than-expected increase of earnings in the third quarter as US wholesalers cut inventories and Brazil was stagnant after the soccer World Cup.

Finnish winter tyre specialist Nokian Renkaat dropped 7 percent after warning its full-year operating profit could be 22 percent lower than in the previous year due to dropping sales in Russia.

So far in Europe's earnings season, about 60 percent of companies have exceeded analyst estimates, well above the average seen since 2011 of 48 percent of European companies beating the forecasts. Third-quarter earnings are expected to grow 10.7 percent.

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Tags:  US  stock market  Europe  Nikkei  

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