US stocks have finished higher for a second day of gains on the back of the Federal Reserve’s new QE3 stimulus, tracing the earlier rises of markets in Europe and Asia.

Mining and energy shares and related industries led the way higher, followed by retailers, all buoyed by prospects for improved growth next year.

The Dow Jones Industrial Average finished on Friday up 53.51 points (0.40 per cent) at 13,593.37.

The S&P 500 added 5.78 (0.40 per cent) to 1465.77, while the tech-rich Nasdaq gained 28.12 (0.89 per cent) to 3183.95.

Markets worldwide were roundly higher after the Fed announced its QE3 bond-buying program Thursday and pledged to keep going with stimulus until the economy and jobs market showed solid signs of sustained growth.

Caterpillar jumped 2.8 per cent, Freeport McMoran 2.0 per cent, Cliff Resources 5.5 per cent, and Bank of America 3.5 per cent.

Office supply retailer Staples jumped 2.1 per cent on talk that several private equity firms are weighing possible efforts to take over the company.

Other retailers gained: Fossil was up 9.6 per cent, Kids Brands 13.6 per cent, and Oshkosh 8.2 per cent.

Apple added 1.1 per cent, still riding the wave of its launch of the iPhone 5 this week. But telecoms shares fell, with Verizon and AT&T both losing 2.4 per cent, as analysts said the new iPhone would hit their margins.

Bond prices dropped sharply. The yield on the 10-year Treasury rose to 1.87 per cent from 1.76 per cent on Thursday, while the 30-year yield rose to 3.09 per cent from 2.97 per cent. Bond yields move inversely to prices.