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Stock Market Today: Stocks Hit New Highs as Japan Boosts Stimulus


NEW YORK (TheStreet) -- Fears of a slowdown in Europe and Asia pulled markets lower at the start of October, but strong third-quarter earnings in the U.S. combined with better-than-expected economic data globally and central bank stimulus outside of North America pushed markets to new highs.

U.S. stocks surged Friday morning after the Bank of Japan unexpectedly increased its annual stimulus targets by 10 trillion yen to 80 trillion yen. The Nasdaq opened at a 14-year high and the Dow Jones Industrial Average and S&P 500 hit new record highs shortly after the market open as buying picked up.

The S&P 500 was trading higher by 1.07% at 2,016 in mid-morning trading. The Nasdaq was up 1.38% to levels not seen since the dot-com bubble burst. The Dow gained 1.08%, touching a new record high with all 30 Dow components rising.

Must Read: Warren Buffett's Top 10 Dividend Stocks

Watch the video below for a closer look at how U.S. markets started the trading day Friday:

The BOJ's surprise move came just days after the Federal Reserve formally ended its monthly bond purchases, which supported U.S. financial markets in recent years. The BOJ previously had targeted annual stimulus of between 60 to 70 trillion yen.

International markets surged on the BOJ’s stimulus increase, which wasn't expected by economists. Japan's Nikkei 225 surged almost 5% in trading on Friday, while the Euro STOXX 60 and FTSE 100 rose 1.4% and 1.11%, respectively.

The U.S. dollar surged more than 2% vs. the Japanese yen to 112.3, while gold continued an October plunge, falling 3% to 1,162 per troy ounce. Oil continued to tumble, with Nymex West Texas Intermediate Crude falling more than 1% to $80.10 a barrel.

The IT sector led the S&P 500 higher, while ultilities were the only industry group trading lower.

In corporate news, oil giants Exxon Mobil (XOM) and Chevron (CVX) beat third-quarter earnings estimates, as did drugmaker AbbVie (ABBV) .

Exxon Mobil reported earnings of $1.89 a share in the third quarter, beating estimates of $1.71. Shares of Exxon were rising in early trading. Chevron also beat earnings Friday morning, reporting $2.95 in third quarter EPS vs analysts forecasting $2.52 in EPS.

Hilton Worldwide (HLT) reported better-than-forecast third-quarter earnings of 18 cents a share on revenue of $2.64 billion. Hilton shares were less than 1% to $25.20.

AbbVie reported better-than-expected third-quarter earnings of 89 cents a share. The drugmaker also adjusted its EPS guidance to $3.25-$3.27 from $3.05-$3.16. Shares in AbbVie were rising 3.68%.

In economic data, personal personal income rose 0.2% in September, slightly less than the 0.3% rise economists had expected. Personal spending, meanwhile, unexpectedly fell 0.2% in September after rising 0.5% the previous month. That data, however, didn't impact the rise in U.S. stock markets.

That represented the largest drop in spending this year. Friday's economic calendar also included Chicago PMI for October, which spiked to a reading of 66.2, far exceeding forecasts of a reading of 60. The University of Michigan final sentiment index for October was 86.9, slightly exceeding consensus of 86.4.

Must Read: Warren Buffett's Top 10 Dividend Stocks

Starbucks (SBUX) missed analysts for its fiscal fourth quarter after the market closse on Thursday, reporting $4.18 billion in sales and earnings of 74 cents a share. Analysts had forecast $4.23 billion in sales and EPS of 74 cents. Starbucks shares were over 2% in Friday trading.

GoPro (GPRO) beat earnings after reporting a profit of 12 cents a share that exceeded analyst estimates by 4 cents. Shares in GoPro surged more 13%.

LinkedIn (LNKD) reported better-than-expected results and gave optimistic fourth-quarter guidance after the market close. The company reported adjusted earnings of 52 cents a share in the third quarter, exceeding forecasts of 47 cents. Full-year EPS is now expected to be $1.89, a slightly higher figure than analysts had forecast. Shares surged 12%.

Citigroup (C) revised its third-quarter earnings lower, saying that recent investigations by regulators have altered the results it reported earlier this month. The bank adjusted its quarterly net income to $2.8 billion from a previously reported $3.4 billion, citing legal expenses.

On Thursday, U.S. stock markets surged after the Commerce Department said U.S. gross domestic product rose 3.5% in the third quarter.

GDP growth in the U.S. hit its strongest six-month pace since the financial crisis, while the four-week average of initial jobless claims in October was the lowest in a decade. U.S. gross domestic product grew 3.5% in the third quarter, beating economists' estimates.

GDP and employment data bodes well for the upcoming holiday season, especially if consumer confidence holds up amid falling gasoline prices. Earlier this week, the Conference Board said consumer confidence reached a seven-year high.

Must Read: Warren Buffett's Top 10 Dividend Stocks

-- Written by Antoine Gara in New York

Follow @AntoineGara

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