NEW YORK - Encouraging news about the U.S. economy extended the stock market’s rally Friday.
The Dow Jones industrial average rose 121.18 points, or 0.8 percent, to 15,354.40. The index gained 1.6 percent for the week and is up 17.2 percent for the year.
The index started higher, then drifted through the rest of the morning. The index added to its gains in the afternoon, climbing about 70 points in the last two hours of the day.
The Standard & Poor’s 500 index rose 17.00 points, or 1 percent, to 1,667.47. The gauge is up 2 percent this week and has gained 16.8 percent this year.
The Nasdaq composite climbed 33.73 points, or 1 percent, to 3,498.97. The technology-heavy stock index got a small boost from Facebook, which climbed 12 cents, or 0.5 percent, to $26.25 on the one year anniversary of its initial public offering.
After some lackluster reports on the economy Thursday, including slowing manufacturing and an increase in applications for unemployment benefits, Friday’s reports were a tonic for investors.
The Conference Board said its index of leading economic indicators rose 0.6 percent last month after a revised decline of 0.2 percent in March. The index is intended to predict how the economy will do in three to six months.
The University of Michigan’s preliminary survey of consumer confidence climbed to 83.7. Economists had predicted that the gauge would climb to 76.8.
Small-company stocks rose the most, a sign that investors are taking on more risk. Two companies soared in their stock-market debuts in the latest indication that the market for initial public offerings is reviving.
Stocks closed higher for a fourth straight week. Indexes are at record levels after surging this year on optimism about the economy and record corporate earnings. The market is also being supported by ongoing stimulus from the Federal Reserve, which is keeping long-term borrowing costs at historically low levels.
“This slow but relatively steady growth, that keeps inflation in check and keeps interest rates low, is actually a pretty healthy environment for the stock market,” said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. “Right now we are very optimistic.”
Gold fell for a seventh straight day, dropping $22.20, or 1.6 percent, to $1,364 an ounce. The precious metal is down almost 20 percent this year and has fallen out of favor as an alternative investment as the stock market has surged this year.
The price of oil rose 86 cents, or 0.9 percent, to $96.02 a barrel.
Business, Pages 32 on 05/18/2013