Stocks Opened Higher after China Rate Cut, Tech Results

U.S. stocks opened higher on Friday, getting a boost from a rate cut in China and better-than-expected earnings results from tech companies such as Alphabet, Microsoft and Amazon. The Dow Jones Industrial Average lately rose 150.76 points, or 0.86%, to 17,639.92. The S&P 500 gained 23.47 points, or 1.14%, to 2,075.98. The Nasdaq Composite was up 108.07 points, or 2.20%, to 5,028.12.

China on Friday cut interest rates and freed its banks to lend more, the government’s latest attempt to confront a persistent slowdown in economic growth. The central bank, the People’s Bank of China, said it would cut the one-year lending rate by a quarter of a percentage point, to 4.35 percent, effective Saturday. The benchmark deposit rate would be lowered by the same amount, to 1.5 percent.

Alphabet’s shares were up nearly 10 percent at $746.95 in premarket trading, far above the $713.33 record high set by Google – the company’s former name – in regular trading in July. A 10 percent rise equates to about $46 billion in market value. This would give Alphabet a market cap of about $519 billion.

Shares of Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O), which also posted better-than-expected quarterly results on Thursday, also jumped in premarket trading, pushing up U.S. stock index futures.

American Airlines Group (AAL) reported stronger-than-expected third-quarter earnings. The company said it had net income of $1.7 billion, or $2.49 a share, in the quarter, up from $942 million, or $1.28 a share, in the year-earlier period.

Procter & Gamble struggled to boost sales in its first quarter.Quarterly revenue for the company that makes products such as Tide, Pampers and Charmin declined to $16.53 billion from $18.77 billion.

Microsoft Corp. (MSFT) is laying off about 1,000 employees, said media reports on Thursday citing unnamed sources. The cutbacks are in addition to earlier moves to eliminate about 7,800 jobs as part of an effort to revamp the former Nokia Corp. handset business, a Wall Street Journal report said.