US stocks rise on Japan stimulus, earnings and energy prices
U.S. stocks are rising Friday morning, led by gains in technology companies after Microsoft reported healthy growth in its cloud computing business. Visa and MasterCard also rose sharply after reporting strong earnings. European markets also rose, and Asian indexes climbed after Japan's central bank announced more aggressive moves to stimulate that country's economy.
KEEPING SCORE: The Dow Jones industrial average rose 189 points, or 1.2 percent, to 16,262 as of 10:35 a.m. Eastern time. The Standard & Poor's 500 index rose 20 points, or 1 percent, to 1,913. The Nasdaq composite rose 57 points, or 1.3 percent, to 4,563.
OPENING WINDOWS: Microsoft added $2.73, or 5.2 percent, to $54.78 after its fourth-quarter profit and revenue beat expectations. The company posted strong results from its cloud computing business and the unit that sells PC software and Surface tablets and Xbox gaming consoles.
AMAZON SINKS: The e-commerce company said its profit more than doubled, but it still fell short of Wall Street forecasts because of increased costs. Some of those related to its Fulfillment by Amazon service, which handles shipping for sellers and makes them eligible for Amazon Prime shipping. The stock lost $53.84, 8.5 percent, to $581.51.
THE ECONOMY: The Commerce Department said U.S. gross domestic product slowed down in the fourth quarter and grew only 0.7 percent. The agency said consumers spent less, businesses invested less, and exports were down because of global instability.
The U.S. economy has been expanding for six and a half years, and experts think growth will pick up in the current quarter. Economists estimate the U.S. economy grew 2.3 percent in 2015, about the same as 2.4 percent in 2014.
XEROX MAKES A COPY: Xerox said it will split into two publicly traded companies after pressure from activist investor Carl Icahn. One of the new companies will focus on document technology, handling document management and outsourcing. The other will be a business process outsourcing company, helping companies with automate and simplify business processes. Xerox gained 49 cents, or 5.3 percent, to $9.72.
BAD MONTH: The Nasdaq is on pace for its worst January ever. The Dow and S&P 500 haven't done this poorly in January since 2009, when the Great Recession was battering the world economy.
INTEREST RATES CUTS: The Bank of Japan said it will charge money to banks that leave large amounts of cash parked at the central bank. The policy is intended to encourage commercial banks to lend more money. That could stimulate investment and growth in Japan's struggling economy.
Asian markets rallied. Japanese bonds fell the dollar got stronger compared to the yen, rising to 121.57 yen from 118.78 yen late Thursday, a huge move for the currency.
OVERSEAS: Japan's Nikkei 225 jumped 2.8 percent and Hong Kong's Hang Seng gained 2.5 percent. The Shanghai Composite in mainland China rose 3.1 percent. European indexes also rose. Britain's FTSE 100 rose 1.8 percent and France's CAC 40 advanced 1.6 percent. Germany's DAX climbed 1.8 percent.
OIL: Crude oil prices continued to rise. Benchmark U.S. oil added 32 cents, or 1 percent, to $33.53 a barrel in New York. Brent crude, a benchmark for international oils, gained $1.04, or 3 percent, to $35.84. Oil prices rose over the last three days as investors hoped for cuts in global oil production.
BONDS AND CURRENCIES: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.93 percent from 1.98 percent. European bond yields sank. The euro weakened to $1.0824 from $1.0955