Stocks rose on Friday with growth-related shares leading the way as investors focused on a brighter U.S. economic outlook.
A stronger euro and retreating euro zone bond yields also helped investor confidence. Benchmark Italian bond yields held below 7 percent, and Spanish yields also fell. Still, worries persisted over possible sovereign credit downgrades to the euro zone members.
It is becoming increasingly apparent the (U.S.) economic recovery is becoming self-sustaining, said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.
I think we're going to see reallocation (into growth sectors) when it becomes apparent the U.S. is not dipping into another recession.
The materials sector <.GSPM> was among the top S&P performers, up 1.7 percent. The energy group <.GSPE> was up 1.2 percent as U.S. oil futures added 0.5 percent.
Copper prices added 2.1 percent. Gold rallied about 2 percent but was still on course for a weekly loss.
The Dow Jones industrial average <.DJI> put on 86.28 points, or 0.73 percent, at 11,955.09. The Standard & Poor's 500 Index <.SPX> was up 13.78 points, or 1.13 percent, at 1,229.53. The Nasdaq Composite Index <.IXIC> jumped 41.46 points, or 1.63 percent, at 2,582.47.
Online game maker Zynga Inc
U.S. consumer prices were flat in November as Americans paid less for cars and gasoline, while the 12-month inflation reading fell for the second straight month, which could give the Federal Reserve more room to help a still-weak economy.
Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said subdued inflation will be a long-term positive as consumers benefit from contained prices.
That's one of the reasons you're seeing better consumer (confidence) of late, he said.
Research In Motion Ltd
Shares of Adobe Systems Inc
Data this week suggested a strengthening U.S. economic recovery, giving further support to equities.
Jobless claims fell to a 3-1/2-year low last week and factory activity in parts of the U.S. Northeast picked up in December, data showed Thursday.
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)