US open: Markets soar after unexpected stimulus from BoJ

US stocks soared on Friday, as the Dow Jones Industrials hit a new all-time intra-day high of 17,350.93 soon after the open, with investors buoyed by an unexpected boost to stimulus from the Bank of Japan.

Soon after 10am in New York, the Dow Jones Industrial Average was 135.15 points up to 17,330.31, while the S&P 500 advanced 18.38 to 2,012.94 and the Nasdaq was 51.04 points higher to 4,151.67.

Japan’s Government Pension Investment Fund announced it will put half of its holdings in local and foreign stocks, doubling previous levels, and invest in alternative assets.

The Bank of Japan raised its annual target for monetary expansion to 80trn yen ($724bn) from 70trn yen.

The US employment cost index (ECI) was stronger than expected and rose 0.7% from the previous three months in the third quarter, exceeding analysts’ consensus of 0.5%, while the year-on-year increase came in at 2.2%.

Growth in wages and salaries printed at 0.8%, continuing the steady upward trend in place since the first quarter, when wages and salaries only increased 0.3% from the previous three months.

“Government sector employment costs are growing at a slightly slower, but still solid pace of 0.5% quarter-on-quarter and 2.1% year-on-year,” Barclays analysts said in a note.

“We continue to expect wage growth to rise gradually this year, reflecting continued improvement in the labour market and a reduction in labour market slack.”

US personal spending fell 0.2% in nominal terms in September, lower than analysts’ expectations of 0.1%.

The personal consumption expenditures (PCE) price index rose 0.1% month-on-month on both overall and core measures, leaving the two parameters up 1.4% and 1.5% year-on-year, respectively.

In corporate news, Linkedin rose sharply after better-than-expected sales, while Gopro soared after its prediction for fourth-quarter profit surpassed analysts’ projections.

Starbucks slid after announcing later on Thursday that its fourth quarter revenue missed estimates, while Apple opened at an-all time high of $108.01.

Gold futures slid to $1,162.60, a level not seen since 2010, as the dollar surged forward following a surprise stimulus move from the Bank of Japan.

The greenback gained over 2.5 percentage points on the yen and it also registered smaller gains against the euro and the pound.

West Texas intermediate and Brent crude both fell, trading at just under $80 and $85 a barrel respectively.

The yield on the 10-year US Treasury note rose two basis points to 2.32%, while the yield on the 30-year note advanced one basis point to 3.06 and the five-year Treasuries rose three basis points to 1.60.