U.S. stocks extended their gains on Friday as a tech sector rally drove benchmarks up for a second consecutive day. The rally was supported by new earnings reports released by a number of leading tech companies as well as a rebound in the troubled biotech sector. The gains were strong enough to move the S&P 500 into positive territory for the year and above its 200-day moving average for the first time since late August. An unexpected interest rate cut in China added more fuel to the rally as Beijing follows up on its commitment to aiding the slowing Chinese economy. In earnings reports, Microsoft’s (O:MSFT) latest numbers have beaten expectations for the ninth quarter in a row, propelling its shares more than 10% higher to their highest price in 15 years. Microsoft’s gains were enough to lift all three major U.S. benchmarks as it accounted for around a third of the Dow’s gains as it led the technology sector. Alphabet Inc (O:GOOGL) and Amazon (O:AMZN) also beat expectations, helping their shares gain 5.6% and 6.2%, respectively. Overall, the Dow Jones Industrial Average added 157.54 points, or nearly 1%, to trade at 17,646.7. The Standard and Poor’s 500 index rose 22.74 points, or around 1.1%, to trade at 2,075.15 and the Nasdaq Composite gained 111.81 points, or 2.27%, to close the trading week at 5,031.86. Looking at the entire week, the Dow Jones, S&P and Nasdaq added 2.5%, 2.1% and 3%, respectively.
China’s surprise interest rate cute added fuel to the European rally already in progress following the European Central Bank’s comments on monetary policy on Thursday, where the central bank had announced that it will likely expand its current stimulus programs. The pan-European FTSEurofirst 300 gained 2.1% after similar gains in the previous session. The Euro Stoxx 50 index performed similarly well with a 2.5% gain. The German DAX 30 posted its strongest weekly performace since 2011 as the index closed the week with 302.57 points added, or 2.88%, to 10,794.54. The DAX was aided by gains in the auto sector, most notably from Daimler (DE:DAIGn) and BMW (DE:BMWG) . The UK’s FTSE 100 gained 67.8 points, or 1.06%, to trade at 6,444.08 and the French CAC 40 rose 121.46 points, or 2.53%, to trade at 4,923.64.
Next week’s major economic data releases begin on Monday with the release of German business climate indexes and U.S. housing data. U.S. durable goods orders will be released on Tuesday, followed by Japanese and German retail sales data. However, Wednesday’s main event will be the Federal Reserve’s interest rate decision towards the end of the day.