Most stocks continued to move higher Friday, after investors learned that consumer sentiment moved up just a bit in August and the Conference Board's index of leading indicators, a measure of how the economy will be doing in six months to a year, rose 0.4% in July after falling 0.4% in June.
The Dow Jones industrial average was higher in lunchtime trading as were the broader Standard & Poor's 500 index and the tech-heavy Nasdaq composite index.
Investors were especially pleased with retailer earnings, including Gap, which boosted its outlook and posted a 29% jump in net income, suggesting the operator of Gap and Old Navy stores is finally on the way to a turnaround.
After coming within a few points of a new bull market high in Thursday's session, Wall Street is closely watching to see if today is the day the Dow Jones industrial average and the broader Standard & Poor's 500 index can sail past the highs hit earlier in the year and get back to levels last seen more than four years ago.
The Dow closed yesterday at 13,250.11 and is within 29 points of a new 2012 high. If it can take out its May 1 high of 13,279.32 high, it would mark its highest level since the 2008-09 financial crisis and December 2007.
Similarly, the S&P 500 is also on the precipice of a multiyear high. It closed Thursday at 1415.51, less than four points shy of its April 2 high of 1419.04. If the benchmark index can take out its prior 2012 high, it would be its highest level since May 2008.
The Nasdaq composite index has been doing very well so far this year, it's up nearly 18% year-to-date. However, if the Nasdaq broke through highs set earlier this year, any gains from there would break levels not seen since the Internet bubble in 2000.
The University of Michigan-Thomson Reuters index, a monthly measure of how consumers feel about their personal finances as well as business and buying conditions in the economy, rose to 73.6 from a July reading of 72.3, according to a report from the index producers. Economists had been expecting the index to decline because of economic uncertainty.
Overseas, European stocks rose in early trading. Britain's FTSE 100 gained 0.1% to 5,843 while Germany's DAX was 0.4% higher at 7,019 and France's CAC-40 was up 0.25% at 3,481. In the Netherlands, the AEX index rose 0.7% to hit a year-high of 336.
While visiting Canada, Germany Chancellor Angela Merkel repeated her commitment to doing whatever is needed to preserve the euro. In addition, German July producer prices came in lower at 0.4% versus expectations of 0.9% year on year — potentially giving ammunition to those who argue the European Central Bank could further ease monetary policy if it wishes.
The 17 countries that use the euro have been struggling for the past three years to cope with huge debts and recession. Spain and Italy, the two big trouble spots, are threatened with a financial collapse that could tear the 13-year-old currency union apart and rock the global economy.
The immediate flashpoint may be Greece, which is hoping for more lenient terms on its most recent bailout package.