Stocks rose on Friday as the Group of Seven nations moved to calm markets amid Japan's crisis and as Brent oil slipped, but investors are likely to stay cautious heading into the weekend.
In a move to reassure markets anxious about the nuclear crisis in quake-ravaged Japan, the Bank of Japan bought billions of dollars to restrain a soaring yen and was followed by U.S. and European central bank purchases.
Brent crude was down 51 cents at $114.39 a barrel in volatile trading after Libya announced a ceasefire and agreed to halt military action against rebels after a U.N. resolution.
Investors were relieved by the news about Libya and by the yen intervention, said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates on Toronto, but Friday's gains could be short-lived.
I don't think this is the kind of market where people want to leave positions open with the weekend coming up, Kumar said, citing the crisis in Japan and potential for further unrest in the Middle East and North Africa.
The Dow Jones industrial average <.DJI> was up 100.39 points, or 0.85 percent, at 11,874.98. The Standard & Poor's 500 Index <.SPX> was up 8.82 points, or 0.69 percent, at 1,282.54. The Nasdaq Composite Index <.IXIC> was up 10.27 points, or 0.39 percent, at 2,646.32.
The iShares MSCI Japan Index Fund
Friday also marks the quarterly expiration and settlement of March equity options and futures, which could add more caution to the market.
The Standard & Poor's 100 index <.OEX> has more expiring in-the-money put open interest than call open interest, so there could be a slight negative bias to option expiration, according to Larry McMillan, president of McMillan Analysis Corp in a report.
The yen fell broadly, with the dollar gaining about 3 percent against the currency.
The yen's sharp rise in the aftermath of the crisis threatened to aggravate Japan's economic woes by stalling exports from the world's third largest economy.
Bank shares jumped as the Federal Reserve announced it will allow some of the largest U.S. banks to boost or restart dividend payments this year but will restrict the amounts to 30 percent or less of the company's anticipated earnings.
Wells Fargo and Co
(Reporting by Caroline Valetkevitch, additional reporting by Edward Krudy and Doris Frankel; Editing by Kenneth Barry)