A broad rally swept through the stock market Friday after McDonald's and several other large companies reported solid earnings. The Standard & Poor's 500 index closed higher for the third straight week, its best run since February, as hope builds that a weekend meeting will bring European leaders closer to easing the region's debt troubles.
The Dow Jones industrial average jumped 267.01 points, or 2.3 percent, to 11,808.79. The Dow is now up 2 percent from where it started 2011. Before Friday's surge, it was down for the year. The Dow has risen for four weeks straight, the first time that has happened since January.
The combination of stronger earnings, better economic news and a sense that European officials were taking the debt crisis more seriously have helped lift stocks, said Phil Orlando, chief equity market strategist at Federated Investors. "It seems like there's a greater sense of urgency to deal with Greece and the sovereign debt trouble in Europe," Orlando said.
McDonald's Corp., Chipotle Mexican Grill Inc. and Harman International Industries Inc. were among the companies that beat analysts' expectations. The quarterly earnings season is off to a strong start. Of the 118 companies that reported earnings so far, 75 percent have beaten estimates, according to financial data provider FactSet.
The encouraging corporate news was in line with recent signs that the U.S. economy strengthened in September after a very weak summer. On Friday the government said unemployment fell last month in half of U.S. states and was unchanged in 11. That's much better than in August, when unemployment rose in 26 states.
Markets have been moving sharply in recent weeks, mainly in reaction to the latest headlines out of Europe on the debt crisis. The Dow had a bigger jump on Oct. 10, 330 points, after the leaders of France and Germany pledged to have a comprehensive solution to the debt crisis in place by the end of the month. The Dow has now gained 10.8 percent since Oct. 3, when it sank to its lowest point of the year.
The S&P 500 gained 22.86 points, or 1.9 percent, to 1,238.25. Rising stocks in the S&P outpaced falling ones by a margin of 20 to 1: only 23 companies traded lower.
The Nasdaq composite index gained 38.84, or 1.5 percent, to 2,637.
European markets closed sharply higher as investors hoped that European leaders will agree on a package of measures to address the region's debt crisis in time for a summit scheduled for Wednesday. Germany's DAX index rose 3.5 percent. France's CAC 40 and Italy's FTSE MIB rose 2.8 percent.
Traders sold ultra-safe U.S. Treasury debt as riskier assets rose. The yield on the 10-year Treasury note rose to 2.22 percent from 2.18 percent late Thursday. Bond yields rise as demand for them falls and their prices decline.
Stocks were lifted earlier this week by better news about the U.S. economy. A measure of manufacturing in the Philadelphia region grew in October after contracting for two straight months. The number of people claiming unemployment benefits declined last week, and inflation remains low.
Among the companies reporting earnings late Thursday or early Friday:
— McDonald's Corp. rose 3.7 percent after reporting a 9 percent increase in income. The results beat analysts' expectations and marked McDonalds' ninth straight quarter of gains.
— Harman International Industries Inc. jumped 20.6 percent, the most in the Standard & Poor's 500, after the audio equipment maker's income trumped expectations.
— Chipotle Mexican Grill Inc. leaped 8.3 percent after reporting a 25-percent jump in third-quarter income. The fast-casual chain raised prices, sold more burritos and opened new stores.