Stocks rebound: Dow caps fifth triple-digit day

Trader: All about the dollar
Trader: All about the dollar   

U.S. stocks rose sharply on Friday, cutting losses for the week, after the government raised its estimate of economic growth in the second quarter and consumer sentiment rose in September.

"We're rallying because we're oversold on the week and because we're wrapping up a quarter and a month, so there's a lot of position squaring," said Art Hogan, chief market strategist at Wunderlich Securities.

Nike gained, a day after the athletic-apparel company reported first-quarter profit that beat expectations; BlackBerry rose after the Canadian smartphone maker posted a smaller quarterly loss and its CEO projected the tech company would double its software revenue next year; Janus Capital Group surged on news that Bill Gross is joining the investment firm, leaving Pacific Investment Management Co., the investment firm he co-founded and was about to be fired from, CNBC learned.

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Traders on the floor of the New York Stock Exchange.
Getty Images
Traders on the floor of the New York Stock Exchange.

"If the economy continues to gain additional momentum, any surprises we get to earnings would be to the upside," said Bruce Bittles, chief investment strategist at RW Baird & Co.

Data from the Commerce Department had gross domestic product increasing at a revised 4.6 percent annualized rate, up from the prior estimate of 4.2 percent, and in line with expectations.

Read MoreUS economy expanded at fastest rate in nearly three years last year

The Thomson Reuters/University of Michigan's final read on consumer sentiment climbed to 84.6 in September from 82.5 the month before.

Read MoreConsumer sentiment rises to 14-month high

The economic reports were "a mild positive, but not shockingly good," said Hogan, who chalked up Friday's rally, as well as market moves throughout the week as "once it starts in a direction, nobody wants to get in the way."

S&P 500

After a 202-point jump, the Dow Jones Industrial Average gained 167.35 points, or 1 percent, to 17,113.15 to mark a fifth day in a row of triple-digit moves, its longest such stretch since June 2013. Nike led blue-chip gains that cut the Dow's weekly drop to 1 percent.

The S&P 500 added 16.86 points, or 0.9 percent, to 1,982.85, reducing its weekly decline to 1.4 percent. Energy and technology performed the best and all 10 of the S&P's main industry groups finished in the green for the day, and in the red for the week.

The Nasdaq gained 45.45 points, or 1 percent, to 4,512.19, off 1.5 percent from last week's close.

The Russell 2000 also gained, denting a weekly drop of 2.4 percent. The index of smaller companies had led the broad market declines in play three out of five sessions this week.

"Any further deterioration in the small-cap stocks from here would be a negative and set up some real divergences," said RW Baird's Bittles.

For every share falling, more than two gained on the New York Stock Exchange, where nearly 631 million shares traded. Composite volume exceeded 2.9 billion.

The yield on the 10-year Treasury note used to determine mortgage rates and other consumer loans rose 3 basis points to 2.53 percent.

The dollar rose and commodities priced in the U.S. currency were mixed, with oil futures up $1.01 to $93.54 a barrel and gold futures down $6.50 to $1,215.40 an ounce on the New York Mercantile Exchange.

U.S. stocks declined on Thursday, with the benchmark indexes recording their worst session since July 31, as Apple tumbled on glitches tied to its new smartphone and as investors considered a proposal in Russia that would let its courts seize foreign assets.

Read More Worst day for stocks in nearly two months; Apple hit

"I thing we would have been better off if we'd had a correction this year of 10 percent or so, it would have squeezed out a lot of the excess speculation," said Bittles.

Q2 GDP (revised) up 4.6%
Q2 GDP (revised) up 4.6%