Global Markets Surge and U.S. Indexes Near Records on the BOJ Move

Nichole Harper
31 Oct, 2014
New York City

U.S. and world markets advanced after the Bank of Japan in a surprise move expanded its already large stimulus program and the government controlled pension fund announced plan to increase exposure to stocks. Japanese yen dropped to a seven-year low. Oil and gold continue to slide.

[R]3:00 PM New York – U.S. and world markets advanced after the Bank of Japan in a surprise move expanded its already large stimulus program and the government controlled pension fund announced plan to increase exposure to stocks. Japanese yen dropped to a seven-year low. Oil and gold continue to slide.[/R]

Stocks on Wall Street and in Europe extended weekly gains after the Bank of Japan unexpectedly hiked its already large stimulus program.

Tollbooth Index increased 0.7% or 64.05 to 9,612.42.

S&P 500 index increased 0.9% or 17.76 to 2,012.42 and the Nasdaq Composite Index soared 55.10 or 1.2% to 4,621.37.

Market indexes are nearing the record-high as geopolitical tensions receded, rising earnings from large companies and accommodative policies from central banks.

U.S. Movers

Chevron Corporation ((CVX)) gained 1.1% or $1.31 to $118.48 after the petroleum refiner reported total revenues in the third-quarter ending in September declined 6.5% to $54.68 billion from a year ago period.

Net income in the quarter soared 12.9% to $5.59 billion or $2.95 a diluted share compared to $4.95 billion or $2.57 from a same quarter last year.

Exxon Mobil Corporation ((XOM)) jumped 1.7% or $1.57 to $96.01 after the petrochemicals company said total revenues in the third-quarter ending in September dropped 4.3% to $107.49 billion from a year ago period.

European Markets

In London trading, FTSE 100 index increased 1.1% or 72.83 to 6,536.38 and in Frankfurt the DAX index jumped 2.2% or 197.15 to 9,311.99.

In Paris, CAC 40 index climbed 2.3% or 94.51 to 4,235.75.

Anheuser-Busch InBev SA fell 0.8% to €86.45 after the Belgium-based brewer reported revenue in the third-quarter ending in September jumped 2.3% to $12.24 billion form $11.73 billion a year ago period.

Profit in the quarter declined 4.9% from a year ago to $2.32 billion compared to $2.21 billion and earnings per share jumped to $1.53 from $1.44.

BNP Paribas SA jumped 3.8% to €50.30 after the French-based lender reported revenue in the third-quarter ending in September dropped 3.9% to €9.54 billion from €9.18 billion a year ago period.

Profit in the quarter soared 10.6% from a year ago to €1.50 billion compared to €1.36 billion.

BNP Paribas set aside provisions in the third-quarter against bad loans in Italy worth €327 million, up 14% compared to the second-quarter.

Asian Markets

Bank of Japan in a surprise move announced to expand its asset purchase program to 80 trillion yen ($725 billion), up from its previous target between 60 trillion yen and 70 trillion yen.

The central bank also lowered its estimate of annual inflation for the next two years largely on the back of weak energy prices.

In addition, the government controlled pension fund, Government Pension Investment Fund, announced plans to invest in alternative assets and also put as much as half of all its assets in domestic and foreign stocks.

The GPIF is the largest pension fund in the world with 127.3 trillion yen in assets.

Japan''s central bank today unexpectedly increased the size of its monetary easing program to 80 trillion yen from 60 trillion yen to 70 trillion yen.

In economic news, the Bank of Japan showed annual core consumer inflation in September dropped for a second month in a row to 3% from 3.1% in August.

The central bank lowered its estimate for the core consumer price index, which excludes volatile food prices, to 1.7% for the fiscal year through March 2016 from 1.9% in July.

The BOJ cut its forecast for inflation largely on the weak oil price.

Average household spending declined 5.6% in September on year-over-year and unemployment rate climbed 3.6% compared to 3.5% in August.

The Ministry of Economy, Trade and Industry reported seasonally adjusted industrial production in September climbed 2.7% to 11.24 trillion yen following the 1.9% decline in August.

On a yearly basis, industrial production increased 0.6% compared to 3.3% drop in the previous month.

The Nikkei 225 Stock Average climbed 755.56 or 4.8% to 16,413.76 and the broader Topix index jumped 54.74 or 4.3% to 1,333.64.

For the week, Nikkei 225 surged 7.3% and for the month increased 2.1%.

The yen surged and closed at 111.60 against one dollar.

The Sensex Index surged 519.20 or 1.9% to close at 27,865.83. The CNX Nifty jumped 153 or 1.9% to 8,322.20.

For the week, the Sensex climbed 3.8% and for the month soared 4.8% and the CNX Nifty soared 3.8% and for the month advanced 4.7%.