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 was expected to rise in its Nasdaq debut after pricing its initial public offering at $10 per share, the top end of its range. Shares are expected to begin trading around 11 a.m. EST <1600 GMT>.

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 posted a sharp drop in profit on Thursday, offered a dismal outlook for BlackBerry shipments during the holidays and delayed an overhaul of its smartphones. The U.S.-traded stock dropped 11 percent to $13.47.

Shares of Adobe Systems Inc jumped 7.3 percent to $28.37 after results from the maker of Photoshop and Acrobat software beat Wall Street projections.

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)