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The dollar rose and US surged to record highs on Friday as lingering worries that the Federal Reserve will soon start to scale back its bond-buying program were quelled by assurances the Fed's policy will remain accommodative.
The volatility that gripped the market earlier this week eased as investors took the view that a likely tapering of the bond program in early next year does not also mean official interest rates will rise soon afterward.
In the lingo of Wall Street, to taper is not to tighten, a revelation that pushed the Dow industrials and benchmark S&P 500 to set both all-time closing and intraday record highs
The surge also led the Dow to close out the week with a seventh straight weekly gain, its longest winning streak since an eight-week rally that began in December 2010. Even after the US central bank starts to scale back its stimulus, monetary policy is likely to be very accommodative for some time, perhaps for years, Atlanta Fed President Dennis Lockhart said on CNBC on Friday.
"The Fed will not start to taper until the economy is able to walk on its own, that's a positive," said Phil Orlando, chief equity market strategist at Federated Investors, in New York. "From a catalyst perspective things are calm; we're sitting just off record highs and in the near term we're probably fairly valued."
MSCI's all-country world equity index, which tracks shares in 45 countries, rose 0.43 per cent. On Wall Street, the Dow Jones industrial average closed up 54.78 points, or 0.34 per cent, to 16,064.77. The S&P 500 gained 8.91 points, or 0.5 per cent, to 1,804.76, and the Nasdaq Composite added 22.495 points, or 0.57 per cent, to 3,991.649. Healthcare stocks led gains, with Biogen leading the S&P higher. Biogen shot up 13.1 per cent to $285.61 on heavy volume after it won 10 years of exclusivity protection for its multiple sclerosis drug Tecfidera from European regulators.
