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U.S. stocks open higher after BOJ decision

Xinhua, January 29, 2016 Adjust font size:

U.S. stocks opened higher Friday, following the release of U.S. economic growth data for the fourth quarter of 2015, as the Bank of Japan (BOJ) unexpectedly decided to implement a negative interest rate policy.

After the conclusion of a two-day policy board meeting, the BOJ said Friday it would introduce negative interest rates from next month to encourage more lending and business spending amid projections the central bank will not clear its 2 percent inflation goal.

The BOJ surprised markets here, with economists widely believing further easing measures announced Friday would be negligible if at all, by saying it plans to introduce a negative interest rate from Feb. 16, as falling oil prices have hampered the bank's reflationary efforts.

While the European Central Bank has already plunged into negative interest rates, the BOJ initially said it was reluctant to follow suit.

Meanwhile, the U.S. real gross domestic product (GDP) increased at an annual rate of 0.7 percent in the fourth quarter of 2015, according to the advance estimate released by the Commerce Department Friday. In the third quarter, real GDP increased 2.0 percent.

Real GDP increased 2.4 percent in 2015, unchanged as in 2014.

Shortly after the opening bell, the Dow Jones Industrial Average rose 124.60 points, or 0.78 percent, to 16,194.24. The S&P 500 gained 12.55 points, or 0.66 percent, to 1,905.91. The Nasdaq Composite Index added 21.24 points, or 0.47 percent, to 4,527.91.

On Thursday, U.S. stocks ended higher after choppy trading, as Wall Street cheered over positive earnings reports and continued oil recovery. Endi