A jump in crude oil and a rise in European markets set off a rally in U.S. stocks to cap a four-week winning streak for major indexes.
Investors bought across industries from Friday’s start of trading. Drillers, refiners and other energy companies rose sharply as the price for U.S. crude hit a high for the year. Devon Energy jumped 11 percent and Southwestern Energy gained 10 percent.
Just a month ago, investors were dumping shares amid talk of a possible U.S. recession. The Standard & Poor’s 500 index fell to almost a two-year low. But confidence has returned as data has suggested the U.S. economy is strengthening.
The S&P 500 is up now nearly 11 percent from Feb. 11.
On Friday, the S&P 500 gained 32.62 points, or 1.6 percent, to 2,022.19. The& DowJones industrial average rose 218.18 points, or 1.3 percent, to 17,213.31. The Nasdaq composite climbed 86.31 points, or 1.9 percent, to 4,748.47.
U.S. crude gained after the International Energy Agency said signs that the market has “bottomed out” have emerged. Energy companies have been shutting down rigs and laying off thousands of workers as oil prices plunged to around $30 per barrel, from well over $100 per barrel just two years ago.
U.S. crude has risen 47 percent from a 13-year low of $26.21 a month ago.
Bank stocks also rose sharply. That sector had been beaten down in recent weeks as investors worried about loans to highly leveraged energy companies going bad.
The rally has got some investors worried, though.
European markets rose sharply as investors hoped that the European Central Bank’s latest blast of stimulus policies would help revive the region’s economy. Germany’s DAX gained 3.5 percent, France’s CAC 40 advanced 3.3 percent and Britain’s FTSE 100 rose 1.7 percent.
The ECB moves included three interest rate cuts, loans to banks, and the expansion of a bond-buying stimulus program. Investors turn their attention to a meeting of the U.S. Federal Reserve next week. Unlike its counterparts in Europe and Japan, the Fed is looking to wind down its economic stimulus, though most investors do not expect it to tighten credit next week. The Fed raised rates for the first time in nine years in December.
Among stocks making big moves, driller Anadarko Petroleum rose $3.79, or 9 percent, to $46.29 after saying it would cut 1,000 workers, or 17 percent of its work force.
Power firm Pepco Holdings fell $2.18, or 9 percent, to $22.07 after officials for the District of Columbia where it operates rejected a proposal to salvage its troubled $6.8 billion merger with Exelon Corp. District regulators rejected the merger twice before.
U.S. crude added 66 cents, or 1.7 percent, to $38.50 per barrel on the New York Mercantile Exchange Brent crude, which is used to price international oils, gained 34 cents, or 0.8 percent, to $40.39 a barrel. Wholesale gasoline rose 0.5 cents to $1.444 a gallon, heating oil rose 0.2 cents to $1.218 a gallon and natural gas gained 3.4 cents to $1.822 per 1,000 cubic feet.
The dollar strengthened to 113.70 yen from 113.11 yen while the euro fell to $1.1157 from $1.1196.
U.S. government bonds fell, pushing their yields higher. The yield on the 10-year Treasury note rose to 1.98 percent from 1.93 percent Thursday
Industrial and precious metals were mixed. Gold fell $13.40 to $1,259.40 an ounce. Silver climbed 5.6 cents to $15.61 an ounce and copper rose 2.1 cents to $2.24 a pound.