Dow, S&P 500 end week with record closing highs
The Dow and S&P 500 hit new closing highs Friday, registering a fifth straight week of stock gains.
The Dow Jones industrial average climbed 91 points, or 0.5% to a new all-time finishing high of 17,810.06.
Up 11 points, or 0.5%, was the Standard & Poor's 500. The index settled at its new closing high of 2063.50.
The Nasdaq composite index added 0.2%.
Global markets rallied sharply as central bankers from China and Europe reiterated their support for markets and struggling economies abroad.
The global rally was sparked after China announced a surprise interest rate cut and the European Central Bank chief Mario Draghi said the ECB is ready to take additional steps to stimulate the weak Eurozone economy.
"Stimulus is stimulating the market," says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
Both moves are designed to jumpstart growth and is the latest example of how stimulus and easy-money policies from central bankers around the globe remains a key support of markets at a time when global growth is still tepid despite an improving U.S. economy.
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Gary Kaltbaum, a money manager at Kaltbaum Capital Management, said the moves by China and the ECB today are part of what appears to be a coordinated effort by global bankers to inject fresh stimulus into the world's financial system. The Bank of Japan recently boosted its stimulus measures as well. The U.S. Federal Reserve, of course, ended its market-friendly bond-buying program last month and is moving towards raising interest rates next year.
Central banks, Kaltbaum adds, remain the driving force in global markets. And remain a key reason why so-called risk assets, such as stocks, continue to rise.
"Just realize the few men and women (at the world's central banks) that run the trillions (in dollars) that have been printed already -- and that will be printed in the future -- remain in control as this massive coordinated effort grows larger and larger."
The move by the People's Bank of China cut interest rates for the first time in more than two years was "spurred by weakness in the manufacturing sector and throughout the property market," according to Alex Eppstein, an analyst at Schaeffer's Investment Research.
Oil markets were higher in the wake of Friday's twin developments. Benchmark U.S. crude was up 34 cents at $76.14 a barrel in electronic trading on the New York Mercantile Exchange.
The yield on the 10-year Treasury note fell to 2.32% from 2.34% Thursday.
In Asian markets, Tokyo's Nikkei 225 index added 0.3% to 17,357.51 and Hong Kong's Hang Seng advanced 0.4% to 23,437.12. The Shanghai Composite surged 1.4% to 2486.79.
China's central bank cut the interest rate on its one-year loans to financial institutions by 0.4 percentage point to 5.6%. The surprise reduction comes in the wake of recent figures showing that the country's annual rate of economic growth slowed to a five-year low of 7.3 percent last quarter.
European markets traded higher after China cut rates, but also following comments from European Central Bank head Mario Draghi.
The ECB boss said the chief monetary authority for the eurozone is willing to "step up the pressure" and broaden its stimulus efforts to help the struggling economy.
"We will continue to meet our responsibility — we will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires of us," Draghi said, speaking at a banking conference in Frankfurt.
The eurozone grew only 0.2% in the third quarter, and recent economic indicators for future growth have been downbeat. Unemployment is 11.5%.
European markets rallied: Britain's FTSE jumped 1.1% to 6750.76, Germany's DAX index rallied 2.6% to 9732.55 and France's CAC 40 gained 2.7% to 4347.23.
Contributing: Associated Press