Stocks rallied sharply Friday, with the Dow gaining 172 points on better-than-expected growth in the gross domestic product last quarter despite disruptions caused by hurricanes Katrina and Rita. The major indexes finished an erratic week higher.
The upswing in economic activity for the July-to-September quarter soothed a market anxious for signs of the economy's health amid fears of a downturn. The GDP figure also overshadowed a drop in consumer confidence and a weak forecast from oil company Chevron Corp.
"It basically drove home the point that the economy was healthy before the hurricanes and indeed may have remained healthy afterward as well," said Doug Porter, a senior economist at BMO Nesbitt Burns, who noted gains in spending and business investment among increases in nearly every GDP component in the Commerce Department's report.
The Dow Jones industrial average jumped 172.82, or 1.69 percent, to 10,402.77, its biggest one-day gain since April 21.
Broader stock indicators were also higher. The Standard & Poor's 500-stock index gained 19.51, or 1.65 percent, to 1198.41, and the Nasdaq composite index climbed 26.07, or 1.26 percent, to 2089.88.
For the week, the Dow gained 1.84 percent, the S&P 500 1.6 percent and the Nasdaq 0.37 percent.
Oil traded in a narrow range despite fears that recovering Gulf Coast facilities will struggle with heating oil demand as winter makes an early approach. A barrel of light crude rose 13 cents on the New York Mercantile Exchange.
Wall Street closed out a week of volatile trading as investors juggled mixed corporate earnings reports and renewed interest-rate worries following the nomination of top White House economist Ben S. Bernanke as the next Federal Reserve chief.
Bernanke, who would replace outgoing Chairman Alan Greenspan in January, is largely expected to keep the Fed's mission of clamping inflation by slowly lifting interest rates and curbing demand. But with oil and gas prices now retreating from record levels, many fear the Fed may go overboard and send the economy sliding.
JetBlue Airways rose 76 cents, to $18.05, after Delta Air Lines announced plans to close its discount carrier Song. AirTran Holdings rose 19 cents, to $14.40.
Chevron rose 88 cents, to $57.38, despite warning that results will be hurt by storm losses.
Microsoft rose 68 cents, to $25.53, on strong quarterly profit and despite a slightly weaker full-year earnings forecast.
New York Stock Exchange composite index rose 106.23, to 7369.55.
American Stock Exchange index rose 18.97, to 1642.58.
Russell 2000 index of smaller-company stocks rose 11.30, to 635.33.
NYSE: 2.4 billion shares, down from 2.41 billion on Thursday. Advancers outnumbered decliners 11 to 4.
Nasdaq: 1.88 billion shares, up from 1.74 billion. Advancers outnumbered decliners 2 to 1.
Crude oil for December delivery: $61.22, up 13 cents.
Gold for current delivery: $473 a troy ounce, down from $473.80 on Thursday.