Encouraging earnings news from major retailers and The Walt Disney Co. drew investors back into the stock market to cap a second big week of gains.
The Dow Jones industrial average gained 73 Friday after falling 94 on Thursday. Major stock indexes rose more than 2 percent for the week.
Upbeat quarterly reports from Disney as well as Abercrombie & Fitch Co. and J.C. Penney Co. offset worries about a slide in consumer confidence.
Disney said late Thursday that higher revenue at its cable, broadcast and movie studio divisions helped drive profits up 18 percent. Abercrombie's results were better than expected, while J.C. Penney raised its earnings and sales forecasts.
The market stumbled briefly in morning trading after a report found that the mood of consumers darkened this month. The preliminary Reuters/University of Michigan consumer sentiment index for November came in at 66.0, down from 70.6 in October. That could bode poorly for the holiday shopping season.
Stocks rebounded after that report but later pared their gains as the dollar pulled off its lows of the day. The dollar's steady slide since March, due largely to record-low U.S. interest rates, has pushed stocks and commodities higher on hopes that it would help U.S. exports, which become cheaper overseas with the weak dollar.
Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors, said investors looked past the consumer confidence figure to focus on earnings reports because they are a more reliable indicator about the economy.
"It's probably safe to say that investors are rationally more focused on what consumers do rather than what they say," he said.
The Dow rose 73.00, or 0.7 percent, to 10,270.47. The Dow's drop Thursday broke a six-day winning streak, as oil prices tumbled following a drop in energy demand and a stronger dollar.
The broader Standard & Poor's 500 index rose 6.24, or 0.6 percent, to 1,093.48. The Nasdaq composite index rose 18.86, or 0.9 percent, to 2,167.88.
For the week, the Dow rose 2.5 percent, after jumping 3.2 percent last week. The gains have boosted the Dow's climb for the year to 17 percent after a slump in late October.
The S&P 500 index rose 2.3 percent for the week, while the Nasdaq added 2.6 percent.
The ICE Futures US dollar index, which measures the dollar against other currencies, fell Friday after rising for two days.
The dollar drove trading during the week, as it has for months. The biggest gain of the week came Monday when the Dow jumped 204 points as a falling dollar increased commodities prices and officials from the Group of 20 wealthy and developing nations signaled they would hold interest rates low to propel economic growth. The Dow rose each day except Thursday.
Randy Frederick, director of trading and derivatives at Charles Schwab, expects the tie between the dollar and stocks to continue.
"As long as interest rates stay low it's going to be difficult for the dollar to gain any strength," he said.
Analysts also say news about consumers will direct the market. Traders will be gathering fresh insight next week with a government report due Monday on retail sales in October as well as quarterly earnings reports from Gap Inc., Home Depot Inc., Saks Inc. and Target Corp.
Investors are worried that consumers won't be ready to spend more as the effects of government spending like the Cash for Clunkers program dissipate.
"The real concern is once the impact of the stimulus works its way through the system is there going to be a smooth handoff to the consumer?" said Jim Baird, chief investment strategist at Plante Moran Financial Advisors.
The latest batch of earnings reports gave some hope. Disney rose $1.39, or 4.8 percent, to $30.44 and posted the biggest advance of the 30 stocks that make up the Dow industrials.
Abercrombie jumped $3.92, or 10.7 percent, to $40.68, while J.C. Penney gained $1.82, or 6.2 percent, to $31.21.
Bonds mostly rose, pushing yields lower. The yield on the 10-year note fell to 3.43 percent from 3.45 percent late Thursday.
Gold rose for the ninth time in 10 days, while oil fell 59 cents to settle at $76.35 a barrel on the New York Mercantile Exchange.
Three stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.9 billion shares, the lowest level in a month. Volume was 4.2 billion Thursday.
The Russell 2000 index of smaller companies rose 5.96, or 1 percent, to 586.28.
Overseas, Britain's FTSE 100 and Germany's DAX index rose 0.4 percent, while France's CAC-40 lost 0.1 percent. Japan's Nikkei stock average slipped 0.4 percent.
The Dow Jones industrial average closed the week up 247.05, or 2.5 percent, at 10,270.47. The Standard & Poor's 500 index rose 24.18, or 2.3 percent, to 1,093.48. The Nasdaq composite index rose 55.44, or 2.6 percent, to 2,167.88.
The Russell 2000 index, which tracks the performance of small company stocks, rose 5.93, or 1 percent, for the week to 586.28.
The Dow Jones U.S. Total Stock Market Index _ which measures nearly all U.S.-based companies _ ended at 11,095.15, up 231.89, or 2.1 percent.