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1st LD Writethru: U.S. stocks surge on China rate cut, upbeat earnings

Xinhua, October 24, 2015 Adjust font size:

U.S. stocks jumped Friday, as the interest rate cut by China's central bank and the release of strong quarterly results from three tech giants ignited investor enthusiasm.

The Dow Jones Industrial Average increased 157.54 points, or 0.90 percent, to 17,646.70. The S&P 500 gained 22.64 points, or 1.10 percent, to 2,075.15. The Nasdaq Composite Index leapt 111.81 points, or 2.27 percent, to 5,031.86.

On Friday, the People's Bank of China (PBOC) cut the reserve requirement ratio (RRR) of banks and the benchmark interest rates.

From Saturday, the RRR for financial institutions across China will be slashed by 0.5 percentage points, to further reduce the cost of financing. Benchmark interest rates will also be cut, to ensure reasonably adequate liquidity in the banking system.

As the economy continues to slow and global financial markets fluctuate, these moves aim to establish a sound financial environment for restructuring and steady growth of the economy, the PBOC said in a separate statement.

Chinese shares closed higher Friday, with the benchmark Shanghai Composite Index rising 1.3 percent to end at 3,412.43 points.

European equities also witnessed solid gains following the PBOC's decision Friday, with French benchmark index CAC 40 jumping 2.53 percent, as the European Central Bank left interest rates unchanged on the previous day.

Wall Street also cheered over positive earnings from tech giants Alphabet, Amazon and Microsoft.

Alphabet, parent of Google, reported better-than-expected profits for the third quarter and announced a buyback after Thursday's closing bell. Its shares (GOOGL) soared 5.61 percent to 719.33 U.S. dollars apiece Friday.

Shares of Amazon.com jumped 6.23 percent to 599.03 dollars apiece Friday, after the company posted a profit on stronger sales.

Microsoft spiked 10.08 percent to 52.87 dollars a share Friday after it delivered a strong performance on both profits and revenues.

In a weekly basis, all three major indices rallied for the fourth straight week, with the Dow, the S&P 500 and the Nasdaq surging 2.5 percent, 2.1 percent and 3.0 percent, respectively. Endit