US stocks climbed on Friday, extending their bounce back from the previous week's slump and marking their best week in nearly a year. Alcoa, Caterpillar and Bank of America were among the gainers in the rally, propelled by improving expectations for the second-quarter earnings season kicking off on Monday.
The Dow Jones Industrial Average rose 59.04 points (0.58%) to 10,198.03, its fourth-straight session in positive territory. For the week, the Dow jumped 5.28%, its biggest weekly gain since the week ended July 17, 2009.
Alcoa was the Dow's best performer in Friday's session and for the week, ahead of the aluminium giant's second-quarter report due out on Monday.On Friday, the stock rose 22 cents (2.1%) to $10.94, putting its jump last week at 9.4%. Caterpillar was also strong, up $1.55 (2.5%) to $64.72, and Bank of America climbed 25 cents (1.7%) to $15.11.
The Nasdaq Composite added 21.05 (0.97%) to 2,196.45. The Standard & Poor's 500 index gained 7.71 (0.72%) to 1,077.96.
The gains came as investors were increasingly viewing the upcoming second-quarter reports as having the potential to propel the market higher as investors shift their focus back to US corporate fundamentals. In recent months, stocks were weighed down by concerns about the global economy, thanks to Europe's debt issues and China's efforts to put the brakes on its growth.
Still, the actual second-quarter numbers will be in the background for many investors, with the outlook for the second half taking on greater importance.
Google climbed $10.93 (2.4%) to $467.49, after the company said its Internet license has been renewed in China, and it looks "forward to continuing to provide web search and local products to our users in China." American depositary shares of rival China's competitor of Google, Baidu, slipped $1.23 (1.7%) to $71.20.
Research In Motion jumped $3.87 (7.8%) to $53.33, after NTP Inc. sued several Research In Motion rivals, including Apple and Google, for patent infringement. Still, Apple rose $1.53 (0.6%) to $259.62.
Ace Ltd. rose $2.47 (4.7%) to $54.69, after Standard & Poor's said the commercial insurer would replace Millipore Corp. in the S&P 500 index after the end of trading on Wednesday, when Millipore's acquisition by pharmaceutical and chemicals company Merck KGaA is expected to close. Millipore slipped 2 cents to $106.93.
KLA-Tencor climbed $1.10 (3.8%) to $29.80. A broker upgraded its investment rating on the stock to outperform from neutral, saying investor concerns were more than priced in and predicting that the supplier of inspection and measurement systems to semiconductor makers probably will see its memory product exposure return closer to historical highs.
For Australian ADRs listed on the NYSE, BHP Billiton advanced $1.09 (1.63%) to US$67.84, Rio Tinto Plc increased $1.01 (2.14%) to US$48.29, ResMed weakened 7 cents (0.11%) to US$64.93, Telstra Corporation dropped 2 cents (0.14%) to US$14.03, Telecom Corporation of NZ rose 12 cents (1.79%) to US$6.84 and Westpac firmed $1.61 (1.68%) to US$97.53.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.05% and the five year yield was 1.84%.
In economic news, wholesale inventories rose 0.5%, in line with economists' expectations, to a seasonally adjusted $398.81bn, after increasing by a downwardly revised 0.2% during April. Meanwhile, sales of US wholesalers decreased 0.3% in May to seasonally adjusted $350.65bn.
European shares closed higher on Friday for the fourth straight session to wrap up the best week in a year.
The Stoxx 600 Europe index rose 0.6% to 250.09, bringing its weekly gain to 5.4%, the best week since the 6.8% jump in the week ending July 17, 2009.
Better news on jobs and comments from central bankers on the economy, together with some details about regulators' plans to test the health of the European banking sector, helped shares recover some ground after two straight weeks of losses.
Shares of Antofagasta advanced 4.1%. A broker upgraded the copper miner to buy from hold, saying that the Chile-based firm's valuation was "both too low and attractive, given the company's commodity exposure and financial strength."
Other mining-sector advancers included Rio Tinto, up 3.2% ahead of an update due out this week, and Kazakhmys, up 2.5%.
The UK's FTSE 100 index rose 0.5% to 5,132.94, the German DAX index added 0.5% to 6,065.24 and the French CAC-40 index also rose 0.5% to 3,553.48.
Of companies in the spotlight, BT Group shares rose 2.9% in London after the telecom carrier reached an agreement with union leadership on a new pay package. "This agreement is good for BT, its employees, shareholders and customers," said Chief Executive Ian Livingston.
Another company of note was Bodycote, its shares rallying 14.1%. The UK engineering group said in a surprise trading update that it expects operating profit for the year to be significantly above the top end of market expectations.
Asian markets broadly rallied on Friday as positive leads from Wall Street prompted buying in exporter shares in Tokyo while the Bank of Korea's rate hike raised investors' confidence in the growth prospects of Asia's fourth-largest economy and lifted shares in Seoul.
The Nikkei Stock Average climbed 0.5% in Tokyo, Hong Kong's Hang Seng Index gained 1.6% and China's Shanghai Composite was the biggest gainer, racking up 2.3%.
New Zealand shares ended higher, although light trading pointed to still highly cautious investors opting to remain on the sidelines. The benchmark NZX-50 ended up 0.7%, or 21 points, at 3,005.25. The index added 2.3% over the course of the week.
Base metals on the London Metal Exchange finished the week on a strong note, extending the week's rally into a fifth-day. Aluminium rose $15 (0.76%) to $2,000 while copper firmed $85 (1.28%) to $6,745 and nickel added $100 (0.52%) to $19,475. Zinc strengthened $15 (0.80%) to $1,880 and lead gained $15 (0.82%) to $1,840. Comex copper was last quoted at 303.20 US cents per pound.
Investors repurchased previously sold gold positions, seeking to capitalise on the metal's recent pullback to what some saw as bargain levels. Spot gold was last quoted at $1,210.75. Comex gold futures improved $13.70 (1.15%) to $1,209.80. Spot silver was last quoted at $18.06.
Crude settled higher on Friday, capping the biggest weekly rally since May, with the focus on dropping crude-oil inventories in the US and rosier economic data. West Texas Intermediate was last quoted at US$76.09 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.7911 euros, 88.60 yen, 1.140 AUD and 66.39 pence.