Investing.com - U.S. stocks rallied on Friday after Japan said it would expand its monetary easing programs, including allowing pension funds to invest more in foreign equities.
At the close of U.S. trading, the Dow 30 rose 1.13%, the S&P 500 index rose 1.17%, while the NASDAQ Composite index rose 1.41%.
The CBOE Volatility Index index, which measures the outlook for market volatility, was down 2.48% at 14.16.
More Japanese money may soon be flowing into U.S. stock markets.
The Bank of Japan said earlier it would raise its monetary base target to an annual increase of ¥80 trillion from ¥60-70 trillion, a preemptive move to steer the economy away from deflationary decline while improving the chances of reaching inflation goals.
Adding to the rally, a Japanese government panel overseeing the Government Pension Investment Fund approved plans on Friday for the fund to raise its holding of foreign stocks to 25% of its portfolio from 12%.
Strong data out of the U.S. also bolstered stock prices.
The Thomson Reuters/University of Michigan final consumer sentiment index rose to a seven-year high of 86.9 this month from 86.4 in September. Analysts had expected the index to remain unchanged.
In addition, industry data showed that the Chicago purchasing managers' index rose to a three-and-a-half year high of 66.2 in October from 60.5 in September, confounding expectations for a reading of 60.0.
The reports overshadowed earlier data showing that personal spending fell 0.2% last month, disappointing expectations for a 0.1% rise, after an increase of 0.5% in August.
U.S. personal income rose 0.2% in September, less than the expected 0.3% gain, after a 0.3% advance the previous month.
Leading Dow Jones Industrial Average performers included Intel Corporation (NASDAQ:INTC), up 4.34%, Chevron Corporation (NYSE:CVX), up 2.27%, and Exxon Mobil Corporation (NYSE:XOM), up 2.25%.
The Dow Jones Industrial Average's worst performers included Wal-Mart Stores Inc (NYSE:WMT), down 0.27%, Nike Inc (NYSE:NKE), down 0.08%, and International Business Machines (NYSE:IBM), down 0.04%.
European indices, meanwhile, ended the day higher.
After the close of European trade, the DJ Euro Stoxx 50 rose 2.55%, France's CAC 40 rose 2.22%, while Germany's DAX rose 2.33%. Meanwhile, in the U.K. the FTSE 100 rose 1.28%.