Global stocks soar on surprise China rate cut
By David Gaffen
NEW YORK (Reuters) - Stock markets worldwide soared on Friday after China cut interest rates for the fourth time this year and several large-cap U.S. technology companies reported better-than-expected quarterly results.
Shares across Asia, Europe and the Americas climbed, having already been boosted by Thursday's message from ECB chief Mario Draghi that the central bank was ready to adjust "the size, composition and duration" of its quantitative easing program.
Wall Street rallied, with the S&P 500 gaining 1 percent to reach its highest since Aug. 20, which marked the beginning of a selloff initially sparked by weak data out of China.
Technology shares led the way, thanks to gains in Alphabet (GOOGL.O: Quote), Amazon (AMZN.O: Quote) and Microsoft (MSFT.O: Quote), after the three companies reported earnings results. The former two hit record highs, while Microsoft rose to a 15-year high.
The Dow Jones industrial average .DJI rose 157.54 points, or 0.9 percent, to 17,646.70, the S&P 500 .SPX gained 22.64 points, or 1.1 percent, to 2,075.15 and the Nasdaq Composite .IXIC added 111.81 points, or 2.27 percent, to 5,031.86.
China, in a surprise move, cut its benchmark one-year lending rate by 25 basis points to 4.35 percent and lowered big banks' reserve requirement ratio by 50 basis points to 17.5 percent.
Long-dated government debt yields rose, as the gains in equities reduced the appeal of safe-haven bonds. China's rate cut did not move commodities investors to bid up oil prices, which were flat to lower.
In the currency markets, the offshore yuan CNH= sagged to its lowest in a month, while the euro fell to $1.10 EUR= to put the dollar on course for its biggest weekly rise against major currencies .DXY since late May. Continued...