Stocks pared gains as news that fighting in Libya was continuing despite Libya's pronouncement that it was ceasing military operations, although bank stocks got a lift as institutions began announcing dividend increases.
The Dow Jones Industrial Average rose more than 100 points, after climbing back from the lows of the yearin Thursday's session.
Among Dow components, JPMorgan , Caterpillar, and American Express gained, while McDonald's slipped.
The S&P 500 and the Nasdaq also rose. The CBOE Volatility Index, widely considered the best gauge of fear in the market, sank nearly 10 percent to below 24. The VIX had been as high as 30 earlier in the week as the Japan nuclear crisis unfolded.
Among key S&P 500 sectors, financials,industrials and materials rose, while consumer discretionary fell.
Stocks immediately shot higher in premarket trading after after Libya announced it was ceasing military operations to protect civilians in the wake of United Nation's decision to create a no-fly zone over the country. The market was already poised to move higher in the wake of a decision by the group of seven largest industrialized nations (G7) to intervene in the currency marketto restrain a soaring yen in the wake of last week’s devastating earthquake in Japan.
Libyan Foreign Minister Moussa Koussa said the country was declaring a ceasefireto protect civilians and comply with a UN Resolution reached late Thursday. Muammar Gaddafi had earlier pledged to crush Libyan rebels with “no mercy, no pity.”
