Stocks rallied in the final hour of trading to close at their highest levels Friday, with all three major indexes logging a 10-week high, amid optimism the euro zone would find a solution to its debt crisis.
The Dow Jones Industrial Average rallied 166.36 points, or 1.45 percent, to finish at 11,644.49, finishing firmly in positive territory for the year.
The S&P 500 jumped 20.92 points, or 1.74 percent, to close at 1,224.58, its best week since Jul. 2009. The Nasdaq jumped 47.61 points, or 1.82 percent, to end at 2,667.85, also higher for 2011.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 29, closing lower for the ninth session.
For the week, the Dow surged 4.88 percent, the S&P climbed 5.98 percent and the Nasdaq surged 7.60 percent. All 30 Dow components finished higher for the week, led by Caterpillar and Disney .
All 10 S&P sectors finished in the black for the week, led by energy. The least positive sector was utilities.
“It’s been up week so there’s been some optimism built in,” said Brian Battle, director and vice president of trading at Performance Trust Capital Partners. “There also doesn’t seem to be any weekend fear, which is why we’re not seeing a big selloff ahead of Friday’s close…There’s already been a bunch of downgrades in the euro zone and banks.”
Treasury Secretary Timothy Geithner said the IMF already has a good supply of uncommitted resources that can be used to help in the battle to stem Europe's debt crisis.
"They have very substantial resources that are uncommitted," Geithner said in a CNBC television interview.
Meanwhile, Standard and Poor's cut Spain's credit rating, citing the challenges facing Europe's finance ministers as they prepare to meet counterparts from the Group of 20nations over the euro zone debt crisis. But the market seemed to shrug off the credit rating agency's latest move.