Stocks closed sharply higher Friday to finish their best week almost two years following a stronger-than-expected manufacturing report that helped calm some doubts over the slowing recovery.
Stocks rallied all week on thin trading volume on the heels of a handful of positive economic news and over optimism that Greece's debt crisis would see a resolution.
The Dow Jones Industrial Average rose 168.43 points, or 1.36 percent, to close at 12,582.77. All 30 stocks on the blue-chip index gained, led by Caterpillar and Alcoa .
The S&P 500 gained 19.03 points, or 1.44 percent, to end at 1,339.67. The Dow and S&P 500 logged their biggest weekly percentage gain since mid-July, 2010.
The tech-heavy Nasdaq climbed 42.51 points, or 1.53 percent, to finish at 2,816.03, marking its best weekly gain in almost two years.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled below 16.
All key S&P sectors gained for the week, led by energy and techs, both up more than 6 percent.
Volume was light ahead of the long weekend with the consolidated tape of the NYSE at 3.25 billion shares, while 865 million shares changed hands on the floor.
"I don't think this momentum's going to continue—I think we'll have to wait until earnings season," Darin Richards, CIO of AKT Wealth Advisors told CNBC. "Clearly, that double-dip recession was out there and people were nervous and that's been taken off the table with some of the manufacturing and some of the positive data."
If second-quarter earnings turn out to be stronger-than-expected, Richards said 1,450 on the S&P is "definitely a reach."
Earnings season 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.
"If not, then 1,400 is a little more conservative, and I think you'll see a little more slow, steady as opposed to this fantastic week we've just had," he said.