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US stocks jump as Microsoft leads a tech stock surge

 

NEW YORK — U.S. stocks are rising sharply on Friday, led by a big gain in technology companies after Microsoft posted a strong fourth quarter, as did Visa and MasterCard. Global stock indexes also rallied. Asian markets climbed after Japan’s central bank announced more aggressive moves to stimulate that country’s economy.

KEEPING SCORE: The Dow Jones industrial average rose 303 points, or 1.9 percent, to 16,374 as of 1:45 p.m. Eastern time. The Standard & Poor’s 500 index added 34 points, or 1.8 percent, to 1,928. The Nasdaq composite picked up 73 points, or 1.6 percent, to 4,580.

OPENING WINDOWS: Microsoft added $2.85, or 5.6 percent, to $54.91 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.

COSTS FLOOD AMAZON: 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 $50.49, or 7.9 percent, to $584.46.

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 60 cents, or 6.5 percent, to $9.83.

CHARGE IT: Visa and MasterCard both rose after reporting solid results. Visa, a Dow component, climbed $3.56, or 5.1 percent, to $72.89 and MasterCard picked up $4.34, or 5.2 percent, to $87.77.

HEAVY INDUSTRY: Honeywell advanced $3.87, or 4 percent, to $101.84 following its fourth-quarter report, and General Electric added 74 cents, or 2.6 percent, to $28.95.

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.

GOOGLE THIS: Google’s parent, Alphabet, might soon overtake Apple as the world’s most valuable publicly traded company. Alphabet stock surged over the last year while Apple has struggled. Both companies are valued at more than $500 billion, and Apple is currently about $10 billion above Alphabet.

IT’S A TRAP: Electronic Arts traded lower. Its profit and revenue forecasts fell a bit short of Wall Street estimates. The video game maker said sales of its “Star Wars: Battlefront” game were strong, but analysts said investors were disappointed with the number of downloads, which are more profitable than sales of physical games.

The stock gave up $6.24, or 8.9 percent, to $63.55. As of Thursday’s close, it was up 26 percent over the last 12 months.

SEAGATE RISES: Electronic storage maker Seagate Technology stock climbed $2.54, or 9.4 percent, to $29.28 after its profit and sales surpassed estimates.

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. Friday afternoon the dollar traded at 121.19 yen, a huge move for the currency, which traded at 118.78 yen late Thursday.

THE QUOTE: Luke Bartholomew, investment manager at Aberdeen Capital Management, said the move by Japan’s central bank is a change of course for the bank and for its governor, Haruhiko Kuroda.

“The surprise is they’re going to negative rates a little more than a week after Kuroda explicitly said they had no intention of doing so,” Bartholomew said. He said the Bank of Japan will need to do more to strengthen Japan’s economy.

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. Germany’s DAX climbed 1.6 percent. Britain’s FTSE 100 added 2.6 percent and France’s CAC 40 advanced 2.2 percent.

OIL: Crude oil prices made small gains. Benchmark U.S. oil rose 31 cents to $33.53 a barrel in New York. Brent crude, a benchmark for international oils, gained 86 cents, or 2.5 percent, to $35.66. Oil prices have been rising 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 also sank. The euro weakened to $1.0838 from $1.0955.

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