Wall St rallied broadly as BOJ ramps up stimulus

By Rodrigo Campos

NEW YORK (Reuters) - The Dow industrials hit a record high on Friday as stocks rallied on Wall Street after the Bank of Japan significantly ramped up its stimulus program, just days after the Federal Reserve wound down its own package of U.S. economic incentives.

The S&P 500 came within 0.25 percent of its record and the December e-minis contract hit an intraday record earlier.

Gains were broad, with close to 90 S&P 500 components hitting new 52-week highs and around 90 more trading within 2 percent of a record.

The BOJ's board voted 5-4 to accelerate purchases of Japanese government bonds while tripling its purchases of exchange-traded funds and real-estate investment trusts.

At the same time, Japan's $1.2 trillion Government Pension Investment Fund announced new allocations for its portfolio, including raising its holdings of domestic and foreign stock holdings to 25 percent each from 12 percent. A Nikkei newspaper report on this announcement on Thursday contributed to an afternoon move higher in U.S. stocks.

The timing of the moves sends a strong signal to investors, as six years of aggressive U.S. stimulus come to an end and as euro zone inflation data kept pressure on the European Central Bank to further ease monetary policy.

"It's not just the (BOJ) easing but the asset allocation from the pension plan is of course also helpful," said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.

"Economic growth (in the United States) is looking pretty good, earnings are good ... we will end the year certainly closer to 2,100 than 2,000 on the S&P 500."

So far this earnings season has been strong, with 75.5 percent of S&P 500 components reporting earnings above analyst expectations according to Thomson Reuters data, above the 63 percent average in the past 20 years.

At 10:37 a.m. (1437 GMT) the Dow Jones industrial average was up 165.81 points, or 0.96 percent, to 17,361.23, the S&P 500 had gained 19.92 points, or 1 percent, to 2,014.57 and the Nasdaq Composite added 62.13 points, or 1.36 percent, to 4,628.27.

The U.S. dollar rallied as well, pressuring crude oil prices and spot gold, which dropped 2.6 percent, the most for any day this year.

"If you're holding gold as a hedge against inflation, how long can you stay there? It's been a losing trade for a while now," Voya's Zemsky said.

U.S. consumer spending fell for the first time in eight months in September but the slowdown is likely to be temporary, as other data showed wages in the third quarter recorded their largest increase in more than six years.

Abbvie shares rose 3 percent to $63 after the drugmaker reported quarterly earnings.

GoPro shares jumped 13.4 percent to $77.41 the day after it forecast better-than-expected holiday quarter sales.

Advancing issues outnumbered declining ones on the NYSE by 2,150 to 741, for a 2.90-to-1 ratio on the upside; on the Nasdaq, 1,923 issues rose and 637 fell for a 3.02-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 120 new 52-week highs and 2 new lows; the Nasdaq Composite was recording 196 new highs and 24 new lows.

(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and James Dalgleish)