By Anora Mahmudova and Barbara Kollmeyer, MarketWatch China's central bank cuts interest rates

NEW YORK (MarketWatch)--The U.S. stock market ended the week in rally mode Friday. Sparked by a surprise dose of liquidity measures launched by China's central bank and dovish comments from European Central Bank President Mario Draghi on Friday, U.S. equities recorded their fifth-straight week of gains.

After timidly moving higher over the course of the past few trading sessions, more detailed talk of stimulus by economic world leaders at some of the biggest, and most sluggish, economies helped push stocks higher. Shares pulled back off their highs later in the trading day, as some of the initial unabashed elation wore off.

Still, the S&P 500 and Dow Jones Industrial Average registered its best one-day gains in more than two weeks and closed at record levels for the 45th and 28th times this year, respectively.

The S&P 500 (SPX) closed 10.75 points, or 0.5% higher at 2,063.50, with broad-based gains led by materials and energy sector stocks. The benchmark index gained 1.2% over the week.

The Dow Jones Industrial Average (DJI) jumped 91.06 points, or 0.5%, to 17,810.06, and booked a 1% gain over the week.

The Nasdaq Composite (RIXF) rose 11 points, or 0.2%, to 4,712.97 and added 0.5% over the past five sessions.

J.J. Kinahan, chief derivatives strategist at TD Ameritrade, commenting on prices pulling back from even loftier levels speculated that the realization that today's news from China and Europe was not all that good may be behind the fading of the rally.

"While in the short term, cutting rates and buying bonds by central banks is good for equities, the underlying reasons are not positive -- those actions are a response to a slowing and weak demand. Their economies are in trouble," said Kinahan.

"Also, the S&P 500 hit a resistance level at 2,071 and it's not surprising to retrench a few times," he added.

China's central bank cut its one-year loan rate by 0.4 percentage points and its one-year deposit rate by 0.25 percentage points while saying it would allow more flexible deposit rates.

The ECB said it began buying asset-backed securities Friday, expanding its quantitative easing regimen.

Before that, Draghi said the ECB will do what it "must to raise inflation and inflation expectations as fast as possible," at a banking conference in Frankfurt. The comments, which resembled his famous 2012 comment that he;d do "whatever" was needed, were taken as a sign the ECB will step-up asset buying.

The asset-based-securities purchases represent the second leg of the ECB's quest to catalyze growth by expanding its balance sheet. In September, the central bank began buying covered corporate bonds, which are guaranteed against a company's assets.

Correction off the table for now: After China's move, the majority of the world's big central banks now have loose policies, while there's growing consensus that the Fed and the Bank of England will hold off near-term tightening, said Benjamin Yip, senior analyst in London for Amplify Trading.

"In light of this, stocks have been bid for the majority of the morning session and apart from some de-risking of portfolios and balance sheets ahead of the weekend, we cannot see any reason for a major correction," Yip said in a note.

Stocks to watch: Sports retailer Hibbett Sports Inc.(HIBB) jumped 4% after lifting its outlook.

Splunk Inc.(SPLK) rose 3.1% after results topped analysts forecasts.

Gap Inc.(GPS) 4.2% slid after results late Thursday missed Wall Street forecasts and the retailer delivered a disappointing full-year outlook.

GameStop Corp.(GME) slid 13% after a set of weak results and outlook late Thursday.

(Read more about today's daily movers in our regular Movers & Shakers column http://www.marketwatch.com/story/foot-locker-ann-gamestop-marvell-in-focus-2014-11-21.).

Europe rallies, euro hit: Europe got a big lift from Draghi's comments and China, with the Stoxx 600 index up 2.1%, while the euro (EURUSD) slid against the dollar. The yen(USDJPY) rose against the dollar to around Yen117.80 after Japan Finance Minister Taro Aso said the yen had declined "too fast" in the past weeks. The Nikkei 225 snapped a four-day losing streak, rising along with the yen.

Among other assets, gold (GCZ4) and oil prices (CLF5) were also higher.

Victor Reklaitis contributed to this article.

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