Wed, October 06, 2010
Business > Markets

Wall Street surges amid global equity rally after Japan cuts rates

2010-10-05 20:08:47 GMT2010-10-06 04:08:47 (Beijing Time)  Xinhua English

NEW YORK, Oct. 5 (Xinhua) -- Wall Street surged on Tuesday amid a global equity rally after the Bank of Japan unexpectedly cut interest rates.

Global markets rose on Tuesday after Japan's central bank cut its key interest rate from 0.1 percent to virtually zero and planned to buy government bonds in order to prop up the faltering economy.

Investors were encouraged by the speculation that other governments will take additional actions to boost the global economic recovery, as the U.S. Federal Reserve has suggested it may engage in further quantitative easing unless the U.S. economic outlook improves.

The U.S. stocks also rose on data that showed the pace of growth in the U.S. service sector accelerated more quickly than economists had expected in September and hiring also increased.

The Institute for Supply Management said its service sector index rose to 53.2 last month from 51.5 in August, the ninth straight month of expansion. Economists had expected a reading of 52.

Service sector accounts for about 80 percent of the U.S. overall economy, and is a predominant job generator. Economists said the September data indicate that the economic recovery is gaining more strength.

The Dow Jones industrial average gained 193.45, or 1.80 percent, to 10,944.72 points. The Standard & Poor's 500 index rose 23.72 points, or 2.09 percent, to 1,160.75 and the Nasdaq was up 55.31 points, or 2.36 percent, to 2,399.83.

Crude prices rose on Tuesday as the stock market rallied on positive economic news and the greenback fell against the euro.

Light, sweet crude for November delivery gained 1.35 U.S. dollars to settle at 82.82 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude rose 1.56 dollars to settle at 84.84 dollars a barrel on the ICE Futures exchange.

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