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Roundup: 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.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, ticked up 0.07 percent to end at 14.46 Friday.

In other markets, the U.S. dollar increased against other major currencies as the economic data from the country came out better than expected.

In late New York trading, the euro fell to 1.1006 dollars from 1.1112 dollars in the previous session, while the U.S. dollar bought 121.40 Japanese yen, higher than 120.71 yen of the previous session.

Oil prices fell as the stronger U.S. dollar made the dollar-priced crude more expensive and less attractive for buyers holding other currencies.

Gold futures on the COMEX division of the New York Mercantile Exchange fell after China reduced its reserve requirement ratio in a move to stabilize world equities.

The most active gold contract for December delivery fell 3.3 U.S. dollars, or 0.28 percent, to settle at 1,162.80 dollars per ounce. Endit