Noman Ali, portfolio manager with MFC Global Investment Management, contends Friday's advance in part reflected a renewed sense of enthusiasm from the Fed's rate cuts. There was relief, too, that the major brokerages reporting results this week turned in better results than Wall Street expected following recent upheaval in the credit markets.
Ali also said economic data such as the week's inflation readings, such as the consumer price index, didn't show unnerving increases in inflation.
"We expect another rate cut in October because inflation is still not an issue," he said, noting the economy seemed to be absorbing higher food prices and oil prices at record levels.
Crude oil futures for November delivery fell 16 cents to settle at $81.61 per barrel on the New York Mercantile Exchange. On Thursday, the October contract, now expired, closed at an all-time high above $83 a barrel.
Gold prices rose, while the dollar bounced back after hitting another record low against the euro, which surpassed $1.41 for the first time. The dollar slumped against other major currencies.
With no major economic reports, Wall Street looked to corporate news.
Oracle rose 93 cents, or 4.4%, to $21.98 following its earnings report.
Harman International Industries fell $27.25, or 24%, to $85 before trading was halted and the maker of upscale audio equipment confirmed reports that two private equity firms backed out of their $8 billion buyout deal.
Meanwhile, cosmetics maker Estee Lauder advanced $1.95, or 4.8%, to $42.58 amid takeover rumors. And Joy Global rose 91 cents to $49.59 after the mining equipment company affirmed its full-year earnings and revenue forecasts.
The Russell 2000 index of smaller companies rose 3.35, or 0.4%, to 813.11.
In trading abroad, Britain's FTSE 100 finished up 0.4%, Germany's DAX index rose 0.8%, and France's CAC-40 rose 0.2%. In Asia, Japan's Nikkei index closed down 0.6% and Hong Kong's Hang Seng Index rose 0.6%.