Stocks gained for a fifth straight session on Friday and were on track to finish their best week in nearly a year following a stronger-than-expected manufacturing reading, helping to dispel some doubts about the recovery.
Stocks have rallied all week on the heels of stronger-than-expected economic news and over optimism that Greece's debt crisis would see a resolution.
The Dow Jones Industrial Average jumped, led by 3M and Alcoa , after closing higher for the second quarter.
The S&P 500 and the tech-heavy Nasdaq also turned higher. The Nasdaq is currently on pace for its best weekly gain in almost two years. The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled to trade near 15.
All key S&P sectors gained, led by consumerdiscretionary and industrials.
On the economic front, the pace of growth in the manufacturing sector picked up for the first time in four months in June, according to the ISM report.
However, consumer sentiment worsened in Juneamid jitters about the economic outlook, according to the Thomson Reuters/University of Michigan survey. Meanwhile, construction spending declined for a sixth straight month during May to its lowest in more than a decade, according to the Commerce Department.
Investors are also looking ahead to second-quarter earnings, which kicks off in the second week of July with Alcoa scheduled to report on Jul. 11. They will pay close attention to corporate forecasts, given the weakness in the economy.