US stocks rallied to nearly a five-month high yesterday on growing conviction that central banks will do even more to bolster struggling economies worldwide.
The Bank of Japan lit the fuse overnight when it unexpectedly cut rates closer to zero. This move came as markets increasingly believe the US Federal Reserve will stimulate its economy in a similar fashion.
Crude oil hit a five-month peak near $83 a barrel and gold hit another record high at $1,341.20 an ounce. The materials sector led the S&P 500, gaining 2.8 per cent, with mining company Freeport-McMoRan Copper & Gold jumping 4.6 per cent to $91.21.
The Dow Jones industrial average gained 193.45 points, or 1.80 per cent, to 10,944.72. The Standard & Poor’s 500 Index rose 23.72 points, or 2.09 per cent, to 1,160.75. The Nasdaq Composite Index jumped 55.31 points, or 2.36 per cent, to 2,399.83.
About 8.77bn shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq.