U.S. stocks joined an advance in global equities, while bonds rallied as the Bank of Japan's unexpected monetary stimulus boosted confidence that central banks remain vigilant of slowing economic growth. The yen tumbled, while oil gained.
The Standard & Poor's 500 Index extended gains throughout the day to post the biggest advance since Sept. 8, while the Dow Jones Industrial Average rose almost 400 points as Microsoft Corp. rallied on earnings. Yields on 10-year Treasury notes retreated, while Japanese yields fell to records after the BOJ adopted a negative interest rate. The yen weakened versus the U.S. dollar by the most in more than a year. Oil climbed for a fourth day.
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(More: Stock market fall raises new questions about the Fed's monetary policy)
TOUGH START
The stock market's gains took the sting out of the worst January for equities since 2009 in a selloff that erased as much as $7.8 trillion from the market value worldwide. The turbulence prompted the Federal Reserve to say on Wednesday that it was closely monitoring the global environment and the European Central Bank to signal last week it could boost stimulus as soon as March. Talk of oil producers taking action to reduce a glut has helped pare crude's drop in 2016 after it plunged to a 12-year low.
“Certainly it's been a tough start to the year for stocks but a lot of the environment that existed for awhile remains modestly in tact,” Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors' U.S. intermediary business, said by phone. “With today's GDP there's modest economic growth and Japan overnight pursuing lower interest rates means the Fed is not likely to raise four times this year.”
STOCKS, MICROSOFT
The S&P 500 rallied 2.5% at 4 p.m. in New York, trimming its drop this month to 5.1%. The gauge and the Dow average both had the best weeks of the year.
Microsoft Corp. rose after quarterly results beat forecasts. Amazon Inc. tumbled as earnings for the holiday quarter missed estimates. Chevron Corp. slipped after posting its first quarterly loss since 2002. Electronic Arts Inc. dropped after the video-game publisher's forecasts for the fourth quarter fell short of expectations.
The MSCI All-Country World Index gained 2%, trimming this month's slide. The Stoxx Europe 600 Index rose 2.2%, while Japan's Topix Index closed 2.9% higher.
