U.S. stocks rose in midday trading Friday, on pace to extend their record highs from a day earlier. News of an interest rate cut in China and the possibility that Europe's central bank will do more to stimulate economic growth drove the rally. Investors also pored over a mixed bag of corporate earnings.
KEEPING SCORE: The Standard & Poor's 500 index gained 12 points, or 0.6 percent, to 2,064 as of 12:03 p.m. Eastern time. The Dow Jones industrial average rose 113 points, or 0.6 percent, to 17,832. The Nasdaq composite added 22 points, or 0.5 percent, to 4,723. The Dow and S&P 500 are at record highs.
SECTOR VIEW: Eight of the 10 sectors in the S&P 500 index rose, with materials stocks climbing the most. Design software company Autodesk led the gainers, adding $4.33, or 7.4 percent, to $62.77. Utilities and telecommunication stocks declined.
EARNINGS SURPRISES: Investors bid up shares in several companies that reported better-than-expected earnings. Software maker Splunk rose $3.72, or 5.7 percent, to $68.66. Sporting goods retailer Hibbett Sports gained $3.70, or 8.1 percent, to $49.63.
EARNINGS MISSES: Shares in Aruba Networks fell 11.6 percent after the wireless communications company's outlook fell short of financial analysts' expectations. The stock shed $2.52 to $19.28. Retailers The Gap and GameStop also reported quarterly financial results that fell short of forecasts. GameStop tumbled $5.52, or 12.7 percent, to $38.02. The Gap shed $2.20, or 5.5 percent, to $37.94.
GOING, GOING, GONE: Sotheby's added 8.3 percent a day after CEO William Ruprecht announced he will step down and that the New York auction house's board has started a search for its next chief executive. Shares rose $3.26 to $42.49.
BOARDROOM DEAL: Dow Chemical agreed to add four new members to its board of directors after pressure from hedge fund activist Daniel Loeb's Third Point. The stock rose $1.46, or 2.8 percent, to $52.94.
CHINA RATE CUT: China's central bank cut the interest rate on its one-year loans to financial institutions by 0.4 percentage point to 5.6 percent. The surprise reduction comes in the wake of recent figures showing that the country's annual growth rate slowed to a five-year low of 7.3 percent last quarter. Many analysts think a key motivation behind the rate cut is the recent steep decline in the value of the Japanese yen, which is likely to impact on China's exports.
DRAGHI ALSO MOVES MARKETS: European Central Bank President Mario Draghi also caused a stir in markets when he told a conference in Frankfurt, Germany, that the bank is willing to "step up the pressure" and increase its efforts to stimulate Europe's struggling economy. His comments sent the euro lower and stocks higher. If current efforts do not achieve the desired effect, Draghi said the ECB could "broaden even more the channels through which we intervene." For many in the markets, that's a clear hint that the bank could soon starting buying government bonds.
OVERSEAS MARKETS: In Europe, Germany's DAX jumped 2.6 percent, while the CAC-40 in France rose 2.7 percent. The FTSE 100 index of leading British shares rose 1.1 percent. In Asia, Japan's Nikkei index rose 0.3 percent, while Hong Kong's Hang Seng rose 0.4 percent. Seoul's Kospi added 0.3 percent.
ENERGY: The price of crude oil fell. Benchmark U.S. crude slipped 7 cents to $75.78 a barrel in New York.
BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.33 percent from 2.34 percent late Thursday.
PHOENIX -- Arizona gained 24,700 private-sector jobs last month, enough to push the state's seasonally adjusted jobless rate down a tenth of a point, to 6.8 percent.But all indications are many of these aren't necessarily the best jobs in the world.A new report by the U.S. Bureau of Economic Analysis, also released Thursday, finds that per-capita personal income in Arizona grew between 2012 and 2013 at a rate just 1.0 percent. That takes the average up to $36,983.And the prior year's growth was 3.1 percent.By contrast, the BEA lists national average per capita income for 2013 figure at $44,765, an increase of 1.3 percent in 2013 and 4.4 percent the year before that.And if there's any doubt that the trend is continuing, the federal Bureau of Labor Statistics recently released its own figures of wage growth in the major metropolitan areas between this past September and a year earlier. It found just a 1.2 percent increase in wages and salaries for the Phoenix metro area, versus 2.3 percent nationally.
JetBlue will add bag fees and squeeze seats a bit closer together as it tries to boost profit.
The airline said Wednesday that it will create three ticket classes beginning in the first half of 2015, and only the top two include at least one free checked bag.
Other big airlines have added fees on checked bags since 2008, when they needed money to cover rising fuel costs. In the first six months of this year, U.S. airlines raised $1.7 billion from bag fees. JetBlue's decision will leave Southwest as the only major U.S. airline to let all passengers check a bag free.
The changes seemed to please investors — shares of JetBlue Airways Corp. rose more than 4 percent. Analysts said they showed that incoming CEO Robin Hayes was sharply focused on boosting revenue and controlling costs.
But some passengers complained that JetBlue was sacrificing perks that helped the airline win customer-satisfaction awards year after year.
"Airline tickets are already expensive," said Maxwell Haddad, a real estate professional in New York and longtime JetBlue flier. Not charging for the first bag "was an extra level of kindness or service that JetBlue offered. They seemed to value customer service above and beyond other airlines."
JetBlue executives declined to give prices but said they would fluctuate with demand. They said that fewer than half of JetBlue passengers check a bag.
The airline also will add 15 seats to its Airbus A320 planes, increasing capacity to 165 from 150, and reduce average legroom to 33.1 inches between rows from 34.7 inches now. The makeover will start in late 2016, take two years and still leave more legroom than in the main cabins of bigger airlines, JetBlue executives said.
JetBlue expects that the new fare classes and bag fees will generate more than $200 million a year in operating income, the extra seats will raise another $100 million a year, and other measures will produce $150 million a year.
Hayes, who is currently president and will replace JetBlue CEO Dave Barger in February, said in an interview that other amenities such as free Wi-Fi, snacks and no overbooking mean that the airline can add bag fees and seats without driving away customers.
"I'm confident when customers get on and see the cabin and experience the product, they're going to say, 'Wow, this is actually better than what JetBlue was flying before.'"
JetBlue announced the changes as it met in New York with investors, who have been pressing the company to boost revenue and profit margins. The airline also announced that it would delay 18 Airbus jets that were scheduled for delivery from 2016 to 2018 until 2022 and 2023 to cut capital spending by more than $900 million through 2017.
Shares of the New York-based airline closed up 53 cents, or 4.1 percent, to $13.24. They hit $13.48 earlier in the session, their highest level since November 2005.
S&P Capital IQ analyst Jim Corridore said JetBlue lags other U.S. airlines in financial measures partly because it doesn't charge for bags and has fewer seats than rivals with similar planes. Wednesday's changes will help close the gap, he said.
Corridore said there was little risk that passengers will abandon JetBlue over the changes. He predicted that if JetBlue raises revenue without losing customers, it will convince Southwest to end its holdout and also charge for checking bags.
No chance, said Bob Jordan, executive vice president at Southwest. Jordan said Southwest has extensively surveyed customers to examine the possibility of dropping its perk of two checked bags for free.
"Every time we do the research, even charging for the second bag is a loser" because some passengers would not fly on Southwest, he said.
Marty St. George, senior vice president at JetBlue, said his airline also did plenty of homework, and "We did not find the same conclusion that they did."