U.S. stocks rose on Friday, with the S&P 500 rebounding after its largest drop in three months, as investors drew cheer from the latest round of corporate earnings and found solace in the view that geopolitical tensions appeared contained.
"As tragic as it is, it is probably not something that is going to proliferate," said Matthew Kaufler, portfolio manager at Federated Investors of the airliner crash that came a day after the United States and the European Union strengthened sanctions on Russia.
Google climbed after the Internet search engine tallied second-quarter results; IBM rose after the technology company posted quarterly earnings that topped expectations. AbbVie rose after the drug maker agreed to purchase Shire. General Electric turned lower as the conglomerate planned an initial public offering of its credit-card business.
"Cyclical-oriented industrials should post pretty good results. Valuations are reasonable; I don't think they are cheap, but I don't think they are dear either," Kaufler said.
Friday's "gains are related to earnings that are better than expected from companies like Google and GE, and second, after the worries due to the downing of the airliner and invasion of Gaza, the fact that there is no escalation is being taken as a good sign," said Kate Warne, an investment strategist at Edward Jones.
On Friday, President Barack Obama said at least one American was among the 298 people who died in Thursday's downing of a Malaysian passenger plane at the Ukraine-Russia border. The the investigation of the crash must be credible, Obama said.
Separately, Israel on Thursday announced a ground offensive in Gaza, with Obama saying in his statement Friday that he strongly supported Israel's right to defend itself.
"It's disappointing that both of these conflicts have worsened, but it doesn't seem that either is escalating," said Warne.
A day after surging 32 percent, its biggest jump in more than a year, the CBOE Volatility Index .VIX on Friday fell 17 percent to 12.06, with the gauge of investor uncertainty well below historical norms.