Who’s afraid of October? Stocks finished the week and what is typically a poor market month at record highs after a wild ride that saw prices fall sharply at mid-month before surging higher. The major indexes delivered Halloween treats, as the Dow soared 3.5% last week in active trading.

The fireworks began Wednesday with a brighter view of the U.S. economy and jobs picture from the Federal Reserve, and accelerated Friday on a surprise announcement from the Bank of Japan that it would increase its asset purchases to boost its economy.

Additionally, markets welcomed news Thursday that the U.S. third quarter gross domestic product rose at a higher-than-expected 3.5% annual rate. That assuaged investor fears after the Fed also said Wednesday that, as long anticipated, it ended its monthly quantitative-easing program. Continued strong third-quarter earnings from Corporate America also bolstered investor enthusiasm.

Both the Dow Jones Industrial Average, up 585 points or 3.5% to 17,390.52 last week, and the Standard & Poor’s 500 index, which gained 54 to 2018.05, finished at all-time highs. The Dow rose 2% in October, the S&P 500 2.3%. The Nasdaq Composite index added 147 or 3.3% last week to 4630.72.

“The Fed’s upbeat view of the economy says the long-term U.S. expansion is on track and calmed any fears about the end of QE,” says one market strategist. The Bank of Japan’s surprise move will boost slow global growth, he adds.

That slow growth led to the earlier big drop, says Dan Greenhaus, BTIG’s chief global strategist. It’s been a powerful snapback, helped by good earnings, which are countering fears about plunging oil prices, weak global growth, and a strong dollar. Thomas Lee, co-founder of Fundstrat Global Advisors, says that institutional investors remain cautious despite the market recovery. That augurs well, he adds, for the near-term as markets head into November, the beginning of the historically auspicious November-to-April season for stocks.

Conspiracy theorists might wonder about the Fed’s timing in ending QE, which was followed within 48 hours by BOJ’s bond-buying. Consider the baton passed.

In case anyone forgot, there’s a national election in the U.S. Tuesday, but investors don’t seem to care much about it.

(Source: Barrons Online)

Stocks bounced back last week in a powerful upswing that saw the Standard & Poor’s 500 index soar 4.1%. The rise erased the deep losses of the previous week and then some. Equity markets around the world joined in the rally, up about 2%.

“Investors were buoyed by a combination of sentiment improving on better global economic figures and solid U.S. third-quarter earnings results,” says Yousef Abbasi, a market strategist at JonesTrading.

In particular, the market was bolstered by profit reports from some of the biggest industrial names, continued good U.S. macroeconomic numbers, and better-than-expected—if still unimpressive—euro-zone and Chinese data.

The strong earnings news—from the likes of Caterpillar (ticker: CAT), 3M (MMM), Microsoft (MSFT), and General Motors (GM)—came later in the week and seemed to expunge the memory of the poor showings. The latter, for example, came from equally large mega-cap companies such as International Business Machines (IBM), Amazon (AMZN), AT&T (T), McDonald’s (MCD), and Coca-Cola (KO).

The Dow Jones Industrial Average, which is filled with many of the above-named stocks, didn’t do as well as the S&P. It rose 425 points or 2.6% to 16,805.41. The S&P 500 index gained 78 to 1964.58. The Nasdaq Composite index added 225, or 5.3% to 4483.72, while the Russell 2000 picked up 3.4% to 1118.82.

(Source: Barrons Online)