US, global stocks get big boost Stocks rose across the globe Friday, capping off a seesaw month for investors, after the Bank of Japan unexpectedly announced new stimulus to boost the country’s struggling economy. Japan’s stock market jumped 4.8 per cent to the highest level since 2007. The Dow Jones industrial average rose 163 points, or one per cent, to 17,359 as of 12:05pm Eastern time. According to Associated Press, the Standard & Poor’s 500 index rose 19 points, or one percent, to 2,014 and the Nasdaq composite rose 55 points, or 1.2 per cent, to 4,622. Both the Dow and the S&P 500 are back at record highs and the Nasdaq composite is at its highest level in 14 years. The Bank of Japan surprised investors by announcing it would increase its bond and asset purchases by 10 trillion yen to 20 trillion yen ($90.7bn to $181.3bn) to about 80 trillion yen ($725bn) annually. The announcement came after economic data showed that Japan’s economy remained in the doldrums following a sales tax hike in April. Japan’s inflation slipped and household spending fell in September and the country’s unemployment ticked up. The move comes only two days after the United States Federal Reserve brought an end to its own bond-buying program. Investors have been hopeful that the European Central Bank might also start buying bonds to stimulate that region’s economy by keeping interest rates low and injecting cash into the financial system. That form of stimulus is called quantitative easing, also known among investors as “QE.” “The Japanese central bank has taken the QE baton from the Fed, and equity traders couldn’t be happier,” said David Madden, market analyst at IG. The yen weakened sharply following the Bank of Japan’s announcement. The yen slumped 2.7 per cent against the dollar to 112 yen. The Japanese currency is trading at the lowest level in more than five years. Japanese companies typically like a weak Japanese yen because it makes their exported goods cheaper abroad. After a volatile month, US stocks are on pace to end October broadly higher. The Dow is up 1.8 per cent for the month, while the S&P 500 is up two per cent and the Nasdaq is up 2.8 per cent. All three indexes had been down as much as three to five per cent for the month only two weeks ago. European stock markets rose broadly following the Bank of Japan’s announcement on hopes that the European Central Bank could be tempted to follow Japan’s lead in stepping up stimulus measures. However, few think anything will be announced at the ECB’s next policy meeting next Thursday. “The willingness of the Bank of Japan to ease further in the fight against deflation will encourage those who think the ECB should be doing the same,” said Julian Jessop, chief global economist at Capital Economics. Britain’s FTSE 100 rose 1.2 per cent. France’s CAC 40 jumped 2.4 per cent and Germany’s DAX climbed 2.3 per cent. In the US, GoPro jumped $9.16, or 13 per cent, to $77.30. The maker of small, wearable video cameras posted profit and revenue that was well ahead of analysts’ projections. The company also raised its profit forecast for the fourth quarter. ift.tt/1zWAGiN ift.tt/1qGUBZv [[Boost your social presence with NAIRALIKES nairalikes ]] #nigeria x #nairalikes #vanguardng
Posted on: Sat, 01 Nov 2014 23:04:37 +0000
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