UNITED STATES

U.S. stocks rose on Friday of optimistic profit forecasts from software giant Microsoft and mortgage lender Countrywide Financial.

Stocks rallied on Friday after Microsoft's upbeat outlook boosted the three major indexes and a profit forecast from lender Countrywide Financial buoyed the struggling financial sector. Stocks extended their gains as the weekend approached, in a sign investors are expecting the Federal Reserve to cut interest rates when it meets next week, analysts said.

China's central bank said yesterday that it is necessary to appropriately increase the regulation and control of its monetary policy, improve the formation mechanism of RMB exchange rate, and promote the RMB capital account to be convertible stably.

Shares in Vonage Holdings Corp jumped 42 percent on Friday after it settled a patent dispute with Verizon Communications Inc, raising hopes the Internet-based calling company was emerging from legal troubles.

The dollar fell to fresh lifetime lows versus the euro and a basket of currencies on Friday as investors fretted an anticipated Federal Reserve interest rate cut next week would not be the last.

Turkish helicopters and fighter jets pounded Kurdish rebel positions on Friday as diplomatic efforts began in Ankara to avert a major offensive against the guerrillas based in northern Iraq.

Consumer sentiment fell further than expected in late October to its lowest in more than a year as concerns about the housing slump darkened the economic outlook, a survey released on Friday showed.

Daiichi Sankyo Co Ltd said its first-half net profit would beat its initial estimate by 36 percent aided by strong drug sales overseas, but it only nudged its annual outlook higher as it will likely spend more to buy rights to new drug candidates.

Nissan Motor Co posted a surprise gain of 12 percent in quarterly operating profit on Friday as a pickup in its global car sales outweighed rising commodity prices, and it kept its full-year forecasts unchanged.

Gold climbed to a 28-year peak on Friday and platinum traded just below an all-time high, as a record low dollar and lifetime-high oil spurred buying.

Stocks jumped on Friday, driving the Nasdaq up 2 percent briefly and S&P 500 up 1 percent, after lender Countrywide Financial Corp. said it expects to return to profitability this quarter, easing some fears about financial sector losses.

Microsoft Corp has made progress in getting its Windows software to work on a low-cost laptop computer for poor children that currently runs on rival Linux software, an executive said on Thursday.

Activision Inc is set to launch Guitar Hero 3 amid expectations that the latest installment of its music-themed franchise will be a platinum hit for the second-biggest U.S. video game publisher.

Countrywide Financial Corp posted a $1.2 billion third-quarter loss on Friday as the housing market slumped, but its shares soared after the largest U.S. mortgage lender projected a return to profit this quarter as it slashes jobs and regains its footing. Shares of Countrywide rose $2.87, or 22 percent, to $15.94 in pre-market trading. Stock futures also moved higher.

Institutional money flows into oil are playing a big part in its advance to record peaks, a portfolio manager at commodities hedge fund Tiberius said on Friday.

U.S. oil surged to a nominal all-time high of $92.22 a barrel on Friday, boosting the annual average price to $67.87.

The dollar fell to fresh record lows against the euro and a basket of currencies on Friday as investors, faced with a run of weak U.S. economic data, anticipated a Federal Reserve interest rate cut next week.

Investors bet on Friday on a U.S. interest rate cut to spur slowing economic growth, lifting most world stock markets and dragging the dollar to record lows, but the price of oil hit an all-time high, adding more strains.

Turkish helicopters ferried more troops to the border with Iraq on Friday as diplomatic efforts got underway in Ankara to avert a major offensive against Kurdish guerrillas based in northern Iraq.

Oil rallied to a fresh record high above $92 a barrel on Friday as the dollar tumbled to a record low, Washington imposed new sanctions on Iran and gunmen shut more oil production in Nigeria. Oil's bullish momentum has pulled in increasing amounts of speculative investment and waves of technical buying have been triggered as U.S. oil pierced successive lines of resistance.

Four burned bodies found in the path of California's fierce wildfires raised the death toll to at least 12 people, even as firefighters won the upper hand and officials turned on Friday toward assessing the damage.