US stocks added to a global rally in equities, with the Standard & Poor's 500 Index heading for the first weekly gain this year, on speculation that central banks will expand stimulus measures to counter turmoil in financial markets. Oil surged with emerging-market currencies, while haven assets retreated.
The S&P 500 rose a second day after falling to a 21-month low. The Dow Jones Industrial Average's gain lagged, as disappointing results dragged down American Express and General Electric European shares enjoyed the biggest two-day rally since 2011, while the euro approached a two-week low on the European Central Bank's signal that it may bolster economic support as soon as March. Asian stocks climbed the most since September on speculation Japan and China may also take steps to calm markets. Crude was poised for its steepest two-day rally in five months.
Yields on 10-year Treasury notes rose above 2.05 percent.
"It's a classic oversold bounce after Draghi's comments yesterday and the noise on Japanese stimulus overnight, the question is where do we go from here," said Veronika Pechlaner, who helps oversee $10 billion at Ashburton Investments, part of FirstRand Group. "It's become harder and harder for stimulus to really support the economic fundamentals so it doesn't mean a medium- and long-term change, but at least we have a bit more stable trading environment for a couple of days."
Stocks
The S&P 500 jumped 1.3 percent at 12 p.m. in New York, erasing its loss for the week. The gauge pared its drop in 2016 to 7 percent, and it remains 11 percent below its all-time high set in May. The Dow Jones Industrial Average climbed 0.7 percent, with gains tempered by the biggest one-day slide in American Express since 2009.
"It looks like central banks are on the warpath against weakness," said Andrew Brenner, head of international fixed income for National Alliance Capital Markets in New York. "That's going to put a real risk-on component to today. You've seen enough volatility in the last six months that it's hard to determine if we're going to close up. At this point, it looks very positive."
Purchases of previously owned U.S. homes rose more than projected in December, helped in part by warmer weather and wrapping up the best year since 2006. The Conference Board's measure of the economic outlook for the next three to six months fell 0.2 percent in December after rising 0.5 percent the month before, the New York-based research group said Friday.
The Stoxx Europe 600 Index rose 3 percent, rallying 5 percent in two days. The index advanced 2.6 percent in the week after rising the most in a month yesterday following Draghi's indication that monetary policy will be reviewed as early as March. He reiterated his stance in Davos on Friday.
Emerging Markets
The MSCI Emerging Markets Index climbed 3.2 percent, erasing this week's losses. The gauge closed at the lowest since May 2009 on Thursday, sending valuations to the cheapest since March 2014.
The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong advanced 3.4 percent. Equity indexes in India, South Africa, South Korea, Poland, Turkey, Hungary, the Czech Republic and the Philippines climbed at least 2 percent. Russia's Micex Index added 1.8 percent
Commodities
Brent cruderose 7.3 percent to $31.39 a barrel on the ICE Futures Europe exchange. Prices headed for an 12 percent two-day advance, the biggest since the end of August. In New York, West Texas Intermediate crude climbed 6.3 percent to $31.39.
U.S. natural gas headed for a weekly gain as a snow storm approached the eastern U.S. Futures for February rose 1.9 percent this week and were little changed on Friday at $2.130 per million British thermal units.
Currencies
Russia's ruble rallied 4.2 percent, trimming this month's slide to 7.2 percent. That's the worst performance along with Mexico's peso among 31 major currencies worldwide. Malaysia's ringgit jumped 1.9 percent on Friday, the Colombian peso rose 1.3 percent and South Korea's won climbed 1.1 percent. A gauge of exchange rates for 20 developing nations rose 0.9 percent.
Hong Kong's dollar gained the most in 12 years, rising as much as 0.4 percent, before trading 0.3 percent stronger to 7.7916 against the dollar. The currency, which sank to an eight- year of HK$7.8295 on Wednesday, erased the week's loss and returned to the strong side of its HK$7.75-HK$7.85 trading range.
The yen was set for its biggest weekly drop in more than two months. The currency was down 0.5 percent, extending its weekly decline to 1.1 percent. The euro fell 0.6 percent against the dollar. Monetary easing tends to debase the value of currencies.
Bonds
The 2016 Treasuries rally slowed this week on concern yields that fell to within about half a percentage point from a record low made the market too expensive for some investors.
Spanish government bonds rose for a second day, boosted by the prospect of more ECB debt purchases. Securities from Italy and Portugal also rose after a recovery in oil prices encouraged demand for riskier assets.
Yields on 10-year bonds from Spain fell four basis points to 1.69 percent. They were on course for a weekly decline of eight basis points. The yield on similar-maturity Italian bonds fell two basis points to 1.52 percent, while that on Portuguese 10-year bonds fell 11 basis points to 2.99 percent.
"Expectations of more easing from the ECB is having a positive impact on peripherals," said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. "We have seen a turn in overall risk sentiment with a more dovish message from the ECB" and "higher oil prices," he said
The S&P 500 rose a second day after falling to a 21-month low. The Dow Jones Industrial Average's gain lagged, as disappointing results dragged down American Express and General Electric European shares enjoyed the biggest two-day rally since 2011, while the euro approached a two-week low on the European Central Bank's signal that it may bolster economic support as soon as March. Asian stocks climbed the most since September on speculation Japan and China may also take steps to calm markets. Crude was poised for its steepest two-day rally in five months.
Yields on 10-year Treasury notes rose above 2.05 percent.
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The turnaround in sentiment came amid signs central banks may be prepared to act after $7.8 trillion was erased from the value of global equities this year on China's slowdown and oil's crash. Diminished inflation expectations and a strengthening yen are seen as increasing pressure on the Bank of Japan to enlarge stimulus at its meeting next week. China will keep intervening in its equity market to "look after" investors and has no intention of further devaluing the yuan, Vice President Li Yuanchao said.
"It's a classic oversold bounce after Draghi's comments yesterday and the noise on Japanese stimulus overnight, the question is where do we go from here," said Veronika Pechlaner, who helps oversee $10 billion at Ashburton Investments, part of FirstRand Group. "It's become harder and harder for stimulus to really support the economic fundamentals so it doesn't mean a medium- and long-term change, but at least we have a bit more stable trading environment for a couple of days."
Stocks
The S&P 500 jumped 1.3 percent at 12 p.m. in New York, erasing its loss for the week. The gauge pared its drop in 2016 to 7 percent, and it remains 11 percent below its all-time high set in May. The Dow Jones Industrial Average climbed 0.7 percent, with gains tempered by the biggest one-day slide in American Express since 2009.
"It looks like central banks are on the warpath against weakness," said Andrew Brenner, head of international fixed income for National Alliance Capital Markets in New York. "That's going to put a real risk-on component to today. You've seen enough volatility in the last six months that it's hard to determine if we're going to close up. At this point, it looks very positive."
Purchases of previously owned U.S. homes rose more than projected in December, helped in part by warmer weather and wrapping up the best year since 2006. The Conference Board's measure of the economic outlook for the next three to six months fell 0.2 percent in December after rising 0.5 percent the month before, the New York-based research group said Friday.
The Stoxx Europe 600 Index rose 3 percent, rallying 5 percent in two days. The index advanced 2.6 percent in the week after rising the most in a month yesterday following Draghi's indication that monetary policy will be reviewed as early as March. He reiterated his stance in Davos on Friday.
Emerging Markets
The MSCI Emerging Markets Index climbed 3.2 percent, erasing this week's losses. The gauge closed at the lowest since May 2009 on Thursday, sending valuations to the cheapest since March 2014.
The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong advanced 3.4 percent. Equity indexes in India, South Africa, South Korea, Poland, Turkey, Hungary, the Czech Republic and the Philippines climbed at least 2 percent. Russia's Micex Index added 1.8 percent
Commodities
Brent cruderose 7.3 percent to $31.39 a barrel on the ICE Futures Europe exchange. Prices headed for an 12 percent two-day advance, the biggest since the end of August. In New York, West Texas Intermediate crude climbed 6.3 percent to $31.39.
U.S. natural gas headed for a weekly gain as a snow storm approached the eastern U.S. Futures for February rose 1.9 percent this week and were little changed on Friday at $2.130 per million British thermal units.
Currencies
Russia's ruble rallied 4.2 percent, trimming this month's slide to 7.2 percent. That's the worst performance along with Mexico's peso among 31 major currencies worldwide. Malaysia's ringgit jumped 1.9 percent on Friday, the Colombian peso rose 1.3 percent and South Korea's won climbed 1.1 percent. A gauge of exchange rates for 20 developing nations rose 0.9 percent.
Hong Kong's dollar gained the most in 12 years, rising as much as 0.4 percent, before trading 0.3 percent stronger to 7.7916 against the dollar. The currency, which sank to an eight- year of HK$7.8295 on Wednesday, erased the week's loss and returned to the strong side of its HK$7.75-HK$7.85 trading range.
The yen was set for its biggest weekly drop in more than two months. The currency was down 0.5 percent, extending its weekly decline to 1.1 percent. The euro fell 0.6 percent against the dollar. Monetary easing tends to debase the value of currencies.
Bonds
The 2016 Treasuries rally slowed this week on concern yields that fell to within about half a percentage point from a record low made the market too expensive for some investors.
Spanish government bonds rose for a second day, boosted by the prospect of more ECB debt purchases. Securities from Italy and Portugal also rose after a recovery in oil prices encouraged demand for riskier assets.
Yields on 10-year bonds from Spain fell four basis points to 1.69 percent. They were on course for a weekly decline of eight basis points. The yield on similar-maturity Italian bonds fell two basis points to 1.52 percent, while that on Portuguese 10-year bonds fell 11 basis points to 2.99 percent.
"Expectations of more easing from the ECB is having a positive impact on peripherals," said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. "We have seen a turn in overall risk sentiment with a more dovish message from the ECB" and "higher oil prices," he said