US stocks join rally on ECB stimulus; Dow up 1.3 per cent

NEW YORK (AFP) - US stocks joined a global rally Friday as investors reassessed the European Central Bank’s massive stimulus package in a positive light a day after a wild ride on markets.

The Dow Jones Industrial Average finished at 17,213.31, up a hefty 218.18 points (1.28 per cent).

The broad-market S&P 500 advanced 32.62 (1.64 per cent) to 2,022.19, while the tech-rich Nasdaq Composite jumped 86.31 (1.85 per cent) to 4,748.47 as heavyweight Apple added 1.1 per cent.

Wall Street kept in positive territory all day, following Europe’s main stock markets higher as investors digested the ECB’s mixed monetary policy announcement Thursday.

ECB President Mario Draghi had suggested that the eurozone’s central bank was not planning further interest rate cuts after delivering a larger-than-expected package of actions, sending stocks lower on Thursday.

Pointing to gains in European financial shares, Patrick O’Hare of Briefing.com said that investors decided the ECB did the banks a solid favor by introducing the new targeted longer-term refinancing operations and agreeing to include corporate bonds into its quantitative easing bond-buying programme.

“Sure, deposit rates went deeper into negative territory, but if Mr. Draghi is right and they aren’t going any lower, investors must be thinking that they can now only go higher. That’s a plus for net interest margins down the road,” O’Hare said.

JPMorgan Chase, the largest US bank, gained 1.3 per cent, while Bank of America and Citigroup both leaped 3.9 per cent, Goldman Sachs 1.9 per cent and American Express 1.2 per cent.

Blue-chip industrials scored big advances, with DuPont up 2.7 per cent, Caterpillar 2 per cent, Boeing 1.4 per cent and General Electric 1.3 per cent.

Analysts also pointed to market support from an International Energy Agency report that said falling oil prices “might have bottomed out”. US oil prices closed 1.7 per cent higher at US$38.50 a barrel, spurring gains in oil-related shares.

Anadarko Petroleum surged 8.9 per cent and oilfield services provider Baker Hughes rose 5.2 per cent.

Pfizer led the Dow with a 3 per cent advance. The biggest US drug maker got a lift after the US Food and Drug Administration expanded the use of Xalkori to treat a rare form of lung cancer.

Ulta Salon, Cosmetics & Fragrance soared 17.3 per cent after reporting estimate-topping results for the fourth quarter ended Jan 30 and a stronger-than-expected outlook for the first quarter.