Overnight Markets: Wall Street soars on Japan’s new currency measures

Wall Street on Tuesday surged to its highest since mid-May after Japan took new currency measures to support its economy and better-than-expected data on the US services sector fuelled hopes of a faster global economic recovery.

The Dow Jones industrial average surged 193 points, or 1.8%, to 10,945. The Standard & Poor's 500 Index rose 24 points, or 2%, to 1,161. The Nasdaq Composite Index jumped 55 points, or 2.36%, to 2,400.

Investor sentiment was buoyed after the Bank of Japan slashed its overnight rate target to virtually zero and pledged to purchase 5 trillion yen ($60 billion) worth of assets in a fresh dose of economic stimulus. Markets believed the US Federal Reserve will take similar measures to stimulate the world's largest economy.

Adding to the positive mood, the Institute for Supply Management's index showed the pace of growth in the US services sector accelerated more quickly than forecast in September, while hiring also picked up.

Meanwhile, Australia's central bank kept its interest rates unchanged for a fifth month, thwarting expectations of a hike.

In company news, Dow Chemical added 3.6%, Freeport-McMoRan Copper & Gold gained 4.5% and Newmont Mining rose 1.5%.

The industrials sector moved up 2.7% with Caterpillar surging 2.8% and Cummins gaining 2.8%.

Financials also moved up after analysts at JPMorgan Chase said banks were likely to beat the third quarter profit estimates. Bank of America surged 3.1%, Citigroup climbed 2.5% and JPMorgan Chase added 1.8%.

In current trading, shares in Asia were trading high on Wednesday on speculation more central banks will follow the Bank of Japan’s move to cut benchmark interest rate to spur growth.

The MSCI Asia Pacific Index hit the highest level in almost six months, rising 0.9% to 129 as of 10:43 a.m. in Tokyo. Japan’s Nikkei rose 1.3%, or 126 points, to 9,645, near a two-week intraday high hit earlier in the session. The broader Topix gained 1.1% to 842. Korea’s KOSPI Index was trading 1.1% higher at 1,899. Australia’s S&P/ASX 200 Index climbed 1.3%.