Investing.com -- U.S. stocks surged on Friday after the Bank of Japan provided a jolt to global equity markets worldwide with a surprise decision to lower interest rates into negative territory for the first time in the history of the central bank.
In overnight trading, the Japanese central bank lowered its rate charged to commercial banks that park excess reserves at the central bank to negative 0.1% in a somewhat shocking moved aimed at helping its economy stave off threats of deflation. The move likely increases the possibility that the Federal Reserve could delay its next interest rate hike in the face of weak economic conditions abroad. Any signals of further tightening from the U.S. central are viewed as bearish for U.S. stocks, as investors pile into bonds to take advantage of higher yields.
The Dow Jones Industrial Average gained 393.92 or 2.45% to 16,463.56, while the NASDAQ Composite index added 107.27 or 2.38% to 4,613.95 on a bullish day for stocks. The S&P 500 Composite index, meanwhile, rose 46.75 or 2.47% to 1,940.18, as all 10 sectors closed in the green. Stocks in the Technology, Industrials and Financials industries led, each gaining more than 3% on the session.
Despite Friday's rally, the major indices still ended January with one of their worst months to start a year on record.
The top performer on the Dow was Visa Inc (N:V), which added 4.81 or 6.94% to 74.14. In Thursday's session, Visa narrowly topped analysts' forecasts with its fourth quarter earnings in spite of facing strong currency headwinds. The worst performer was PFE, which added 0.11 or 0.36% to 30.31. Pfizer finished just below Chevron Corporation (N:CVX), which gained 0.48 or 0.56% to 86.40. Earlier on Friday, Chevron (N:CVX) posted its first losing year in terms of annual earnings since 2002.
The biggest gainer on the NASDAQ was Micron Technology Inc (O:MU), which added 1.14 or 11.48% to 11.02. Previously, Micron shares had slumped more than 30% over the last month and 65% over the last 52 weeks. The worst performer was Amazon.com Inc (O:AMZN) which plunged 49.71 or 7.82% to 585.64, after reporting worse than expected earnings on Thursday afternoon. While Amazon finished with its strongest earnings period in its 20-year history, the online giant saw its shares plunge after failing to meet the high expectations of analysts. With the massive sell-off over the last two sessions, Amazon has lost more than $30 million in market capitalization.
The top performer on the S&P 500 was CONSOL Energy Inc (N:CNX), which gained 1.18 or 17.48% to 7.93. It came as crude futures ended the week up more than 8% after finishing with their fourth straight winning session. Amazon was also the worst performer on the S&P, just below Electronic Arts Inc (O:EA) which fell 5.08 or 7.28% to 64.71. A day earlier, the video game giant beat analysts' estimates with its earnings and revenues, but failed to meet expectations with its forward guidance.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 2,763-341 margin.