Market rallies on China's rate move

October 23, 2015 09:29 AM

U.S. stocks opened higher on Friday after a surprise interest rate cut in China added to a broad rally driven by strong quarterly results from Alphabet, Microsoft and Amazon.

China's central bank cut interest rates for the sixth time since November on Friday in another attempt to jumpstart a slowing economy.

"Some of the worst fears associated with China were put to bed at least temporarily," said Ernie Cecilia, chief investment officer of Bryn Mawr Trust.

Global markets rose again, a day after the European Central Bank signaled that it was ready to extend its stimulus plan.

At 9:37 a.m. ET, the Dow Jones industrial average was up 118.19 points, or 0.68 percent, at 17,607.35, the S&P 500 was up 18.22 points, or 0.89 percent, at 2,070.73 and the Nasdaq composite index was up 84.87 points, or 1.73 percent, at 5,004.92.

Shares of Alphabet soared 10.5 percent to a record of $752.50, after Google's new holding company beat profit estimates and set its first share buyback on Thursday.

Microsoft rose 10.3 percent to $53.00, its highest in 15 years, after the company's adjusted revenue beat expectations for the ninth quarter in a row. The stock gave the biggest boost to all three indexes.

Amazon rose to a record of $619.45 after the e-commerce company posted a surprise profit for the second quarter in a row.

The optimism drove Facebook up 1.8 percent, past the $100 mark for the first time, to $101.47 and Twitter up 2.2 percent to $29.79. Apple rose more than 1 percent to $117.03.

Analyst sentiment on overall third-quarter earnings has improved following the string of strong results from blue chips.

S&P 500 earnings for the period are now expected to decline a more modest 3.3 percent than the 4.9 percent forecast at the start of the reporting season, according to Thomson Reuters data.

The Dow and S&P 500 closed at their highest levels in two months on Thursday, driven by strong quarterly results including that of McDonald's.

Whirlpool jumped 2.6 percent to $164.00 after a higher-than-expected profit and a narrowed forecast.

Procter & Gamble rose 4.4 percent to $78.11 after profit beat estimates.

Pandora sank 37.7 percent to $11.96 after the music streaming service provider reported a bigger loss.

Skechers tanked 30.4 percent to $32.16 after its revenue missed estimates.

Advancing issues outnumbered decliners on the NYSE by 1,711 to 975. On the Nasdaq, 1,633 issues rose and 664 fell.

The S&P 500 index showed 43 new 52-week highs and six new lows, while the Nasdaq recorded 69 new highs and 20 new lows.

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Abhiram Nandakumar, Reuters