US pre-open: BoJ stimulus sends futures soaring, indices to open at record highs
A surprise boost to monetary stimulus in Japan prompted a surge in US stock futures on Friday with markets set to open at least 1% higher as investors shrugged off poor domestic consumer-spending data.
Futures on the S&P 500 were up 1.1% as of 09:04 in New York, the Dow Jones Industrial Average rose 1%, while the Nasdaq jumped 1.5%.
Both the S&P and Dow are set to open above their record closing highs of 2,011.36 and 17,279.74 reached last month, respectively.
Just days after the Federal Reserve called an end to its quantitative easing (QE) plan, the Bank of Japan said it would be expanding its bond-buying programme to 80trn yen a year, up from the Y60trn-70trn level which has been in place since April 2013, amid downwards pressure on prices and falling consumer spending.
The move sent the Nikkei nearly 5% higher to a seven-year high and the yen to a seven-year low against the dollar.
In economic data on Friday, consumer spending declined by 0.2% in September, marking the first drop in eight months. The fall came after a 0.5% increase in August and disappointed analysts looking for a 0.1% improvement.
Personal incomes increased by 0.2% after 0.3% growth the month before (consensus forecast: no change).
Meanwhile, the employment cost index, which measures the price of US labour, increased by 0.7% in the third quarter, with the rate of growth unchanged from the second quarter (consensus forecast: +0.5%).