The equity markets end a strong week fueled by earnings, and the Dow breaks through February highs and a key resistance level Google [GOOG 539.41 89.87 (+19.99%) alone, gaining close to 20% today, was responsible for over 3 points of the almost 25 point gain in the S&P 500, and over 24 points of the NASDAQ 100's almost 60 point gain Friday.
Stocks surged on Friday as Internet leader Google and heavy equipment maker Caterpillar showed resilience in the face of a slowing economy with profits that defied Wall Street's modest expectations.
Citigroup also fueled a rally that pushed the Dow to its best week since February as investors took comfort that the No. 1 U.S. bank is taking aggressive steps to resolve credit problems that led to its latest quarterly loss, fueling hopes that the credit crisis is near an end.
All three major indexes ended the week up more than 4 percent.
The week was highlighted by a strong showing from Caterpillar, Google and other companies that generate a large part of their profits overseas. The results helped investors overcome persistent fears about the impact of a devastating credit crisis on business and consumer spending.
Shares of Caterpillar, a manufacturing bellwether, rose more than 8 percent after the company reported stronger-than-expected profits.
In technology, Google shares rose 20 percent to $539.41 on the Nasdaq after the company posted results that quashed fears of a slowdown in online advertising as it said it saw no impact from the weakening U.S. economy.
"What we're seeing in the market today is really a microcosm of what we've seen all week," said Subodh Kumar, chief investment strategist, Subodh Kumar & Associates in Toronto. "The market is prepared to reward companies that are showing strong earnings."
The Dow Jones industrial average <.DJI> jumped 228.87 points, or 1.81 percent, to end at 12,849.36, while the Standard & Poor's 500 Index <.SPX> rose 24.77 points, or 1.81 percent, to 1,390.33. The Nasdaq Composite Index <.IXIC> soared 61.14 points, or 2.61 percent, to 2,402.97.
For the week, the Dow and the S&P 500 each ended up 4.3 percent, while Nasdaq added 4.9 percent.
Large multinational companies benefited from the weak dollar either through the conversion of overseas profits into greenbacks or because they are more competitive against foreign rivals.
Robust international sales also boosted the earnings of manufacturer Honeywell International
Google's solid quarterly results, the first time that its international revenue outstripped U.S. revenue, also lifted other Internet-based shares.
Analysts at six brokerages, including Merrill Lynch and Oppenheimer, raised their share price targets on Google.
Other Internet-based shares trading higher included Chinese search engine Baidu.com
Financial shares also had a strong day, with an index of S&P financial companies <.GSPF> gaining 1.8 percent, helped by Citigroup, which rose 4.5 percent to $25.11.
Citi posted a $5.11 billion quarterly loss and said it will cut another 9,000 jobs after suffering billions of dollars of write-downs tied to mortgages, other debt and a slumping economy. But investors welcomed its efforts to drive down expenses and restore luster to a stock that has fallen by about half over the last year.
Trading was moderate on the New York Stock Exchange, with about 1.48 billion shares changing hands, falling short of last year's estimated daily average of roughly 1.9 billion. On Nasdaq about 2.19 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining stocks by a ratio of about 3 to 1 on the NYSE and Nasdaq.
