MARKET SNAPSHOT: U.S. Stocks Rise; S&P 500, Dow Hit Record

By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks extended gains on Thursday, sending the S&P 500 and Dow Jones Industrial Average to record intraday high levels, a day after the Federal Reserve decided to remain committed to low interest rates.

Investors cheered China's efforts to boost economic growth, while upbeat jobs data outweighed weakness in U.S. housing.

The S&P 500 (SPX) added 7 points, or 0.4%, to 2,008. The Dow Jones Industrial Average (DJI) gained 52 points, or 0.3%, to 17,220. The Nasdaq Composite (RIXF) began the day up 16 points, or 0.4%, to 4,570.

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According to Peter Cardillo, chief market economist at Rockwell Global Capital, enthusiasm ahead of Alibaba debut added to an overall positive market reaction among other factors

Applications for jobless benefits dropped to the lowest level since mid-July, however, construction started on new U.S. homes tumbled in August, pulling back after a surge in July.

Separately, U.S. manufacturers in the Philadelphia region continued to do brisk business in September as hiring intentions rose to a 31-year high, a strong signal that companies expect growth to improve over the rest of the year.

News from China was boosting global equities. China's central bank cut short-term borrowing costs for banks on Thursday, the same week it announced a cash injection into the country's five biggest banks. For markets, this is a "massive statement of intent," amid growth concerns for the country, said Craig Erlam, market analyst at Alpari U.K.

(Also see: Credit Suisse sticks to stocks, but sees a correction ahead http://blogs.marketwatch.com/thetell/2014/09/17/credit-suisse-sees-sp-500-correction-coming-in-2015-but-sticks-to-stocks/?link=instory.)

Stocks to watch: Alibaba (BABA) is expected to start trading on the New York Stock Exchange on Friday morning. The initial public offering could raise over $25 billion, making it the biggest ever. Also read: Alibaba IPO gives insiders rare chance to sell early

Rite Aid Corp.(RAD) is tumbling 17% after the drugstore chain slashed its outlook, blaming generic drugs.

Pier 1 Imports Inc. (PIR) sank 18% after earnings fell short of hopes and the company cut its forecast for the year late Wednesday. (Read more about the day's notable movers here http://www.marketwatch.com/story/epiq-surges-on-activist-stake-rite-aid-sinks-2014-09-18.).

Other markets: The FTSE 100 closed higher as Scottish voters headed to the polls, with indications still pointing to a narrow victory for unionists.

European stocks also got a lift from China's cut in borrowing costs. Japanese stocks climbed to an eight-month closing high, as the yen(USDJPY) hit a six-year low against the greenback, aiding export-related stocks.

The euro (EURUSD) held steady after the European Central Bank allotted 82.6 billion euros in the first round of its new four-year loans, though that take-up fell short. Gold prices (GCZ4) fell 1%, pressured by a strong dollar.

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