Stocks climbed steadily to finish near their best levels Thursday as the euro erased its drop versus the greenback and after a handful of better-than-expected economic data.
But volume remained thin in the final week of trading for the year.
The Dow Jones Industrial Average soared 135.63 points, or 1.12 percent, to close at 12,287.04, led by JPMorgan and BofA .
The S&P 500 jumped 13.38 points, or 1.07 percent, to finish at 1,263.02, moving back into positive territory for the year. The Nasdaq rallied 23.76 points, or 0.92 percent, to end at 2,613.74.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 23.
All 10 S&P sectors finished firmly in positive territory, led by financials and industrials.
“The market will come back to fundamentals…with all the negative headline news, the market was able to salvage modest gains at best,” Eric Thorne, portfolio manager of Bryn Mawr Trust Wealth Management. “I think we’re going to be looking at a hotter economy than a lot of people expect and that’s going to lead to better stock prices and investors in stocks will do pretty well in 2012. It’s really bonds that we’re worried about at this point.”
Meanwhile in Europe, Italy sold just over 7 billion euros ($9 billion) in an auction of longer-term debt, with yields falling.
The yield on Italian 10-year bonds fell from the euro era highs reached in November, settling slightly below the market-sensitive level of 7 percent in an auction on Thursday.
Investors were looking to the auction of longer term Italian bonds to see whether appetite for the country's debt had returned, after yields halved in the sale of six-month T-bills on Wednesday.