The stock market closed out its fifth straight week of gains with another record high on Friday.
The Dow Jones industrial average and Standard & Poor's 500 index carved out all-time highs, extending the market's gains for the week. It was the third record close for the Dow in the week and the fourth for the S&P 500.
The latest records extended a comeback in the S&P 500, which has increased 11 percent since plunging in mid-October. A strong third-quarter earnings season, on top of a recent string of positive U.S. economic data on housing, jobs and manufacturing, have helped put investors in a buying mood.
Investors on Friday cheered news of an interest rate cut in China and the possibility that Europe's central bank will step up stimulus efforts in the region.
"What it suggests is that these central banks are prepared to do even more to stimulate growth, to stimulate demand, and that always equates to better stock markets," said Quincy Krosby, a market strategist at Prudential Financial.
All 10 sectors in the S&P 500 index rose, with materials stocks climbing the most. The sector is up 9 percent this year.
Energy stocks were among the big gainers, getting a boost from a rebound in oil prices. Some traders anticipated that OPEC will decide to cut production at a conference next week.
Ross Stores led the gains in the S&P 500, adding $6.09, or 7.3 percent, to $89.30.
All told, the S&P 500 index rose 10.75 points, or 0.5 percent, to 2,063.50. That's just above the index's previous high close a day before at 2,052.75. The S&P 500 is up 11.6 percent this year.
The Dow gained 91.06 points, or 0.5 percent, to 17,810.06. That's up from its last record close of 17,719 on Thursday. The Dow as gained 7.4 percent this year.
The Nasdaq composite added 11.10 points, or 0.2 percent, to 4,712.97. The index is up 12.8 percent for the year.
The prospect of central banks outside the U.S. ramping up their own stimulus efforts is seen as another positive for stock investors, particularly with the Federal Reserve winding down its massive bond-buying program this year.
"Central bank intervention is the No. 1 thing investors worldwide are looking at right now," said Mike Serio, regional chief investment officer at Wells Fargo Private Bank. "In the short run, that looks pretty good for stocks."
On Friday, China's central bank lowered the interest rate on its one-year loans to financial institutions by 0.4 percentage points to 5.6 percent. The surprise cut came 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.
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.
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 was a clear hint that the bank could soon starting buying government bonds.
Beyond the talk of central bank stimulus, investors had their eye on the latest batch of corporate earnings Friday.
Traders bid up shares in several companies that reported better-than-expected earnings, including software maker Splunk and sporting goods retailer Hibbett Sports. Splunk rose $1.99, or 3.1 percent, to $66.93. Hibbett gained $1.82, or 4 percent, to $47.75.
Video game retailer GameStop and clothing chain operator Gap slumped after delivering disappointing results. GameStop slid $5.68, or 13 percent, to $37.86. Gap fell $1.68, or 4.2 percent, to $38.46.
Wireless communications company Aruba Networks sank 13.7 percent after its outlook fell short of financial analysts' expectations. The stock shed $2.98 to $18.82.
China's interest rate cut raised hopes for increased economic activity and oil demand. That helped lift oil prices.
Benchmark U.S. crude gained 66 cents to settle at $76.51 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.03 to close at $80.36 on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX, wholesale gasoline rose 2.9 cents to close at $2.057 a gallon, heating oil rose 2.5 cents to close at $2.405 a gallon and natural gas fell 22.3 cents to close at $4.266 per 1,000 cubic feet.
In metals trading, gold rose $6.80 to $1,197.70 an ounce, silver rose 26 cents to $16.40 an ounce and copper rose a penny to $3.03 a pound.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.31 percent from 2.34 percent late Thursday.
AP Business Writer Pan Pylas in London contributed to this report.