NEW YORK – Stocks rose Friday as a bullish call on retailer Home Depot (HD) and a reassuring outlook from General Electric Co. (GE) fed investors' optimism that more companies would report positive profit news in coming weeks.
The Dow Jones industrial average (search) ended up 83.55 points, or 0.92 percent, at 9,119.59. The broader Standard & Poor's 500 Index (search) rose 9.44 points, or 0.95 percent, at 988.14. The technology-laced Nasdaq Composite Index (search) advanced 18.07 points, or 1.05 percent, to 1,733.93.
Friday's gains cemented a second straight up week for the three major stock indexes. For the week, the Nasdaq climbed 4.2 percent, while the Dow average rose 0.5 percent and the S&P 500 gained 1.3 percent.
Stocks gained after a reassuring earnings outlook from General Electric fed investors' optimism that more companies would report positive profit news in the coming weeks. But GE's shares, the second- most active on the New York Stock Exchange, gave up earlier gains to close down 7 cents at $28.12.
Many market players spent the trading day bracing for next week's deluge of quarterly earnings, when many of corporate America's biggest names will report results.
"You're rolling into the summer doldrums weekend, and a lot of the industry is out," said Will Porter, director of equity trading at Roth Capital Partners in Newport Beach, California. "Everyone's expectations of earnings are pretty high right now."
Hewlett-Packard (HPQ) was the Dow's biggest percentage gainer for the day, ending up 81 cents, or 3.67 percent, at $22.86, after Prudential Financial initiated research coverage with a "buy" rating.
Home Depot ranked as the Dow's second-biggest percentage gainer, ending up 74 cents, or 2.28 percent, at $33.17. Shares of Home Depot, the world's largest home improvement retailer, rose after Banc of America upgraded its shares to "buy" from "neutral."
Dow component Coca-Cola (KO) declined 10 cents to $43.91 after the soft-drink giant said the U.S. attorney's office was investigating fraud allegations contained in a whistleblower lawsuit against the company. The Securities and Exchange Commission has been informally reviewing Coca-Cola.
Intel (INTC), another Dow component, gained 43 cents to $23.34 after Thomas Weisel upgraded the tech company's stock rating to "outperform" from "peer perform."
Juniper Networks (JNPR) increased 37 cents to $14.48 after the maker of Internet-switching equipment reported operating income that beat estimates by a penny per share; its chief executive, Scott Kriens, also noted continued strength in the broadband market.
Wall Street's mood got a lift from remarks from GE's Chairman Jeffrey Immelt, who said earnings would rise between 3 percent and 7 percent this year.
The forecast came after GE cut the top end of its 2003 profit forecast and said its second-quarter earnings fell 14 percent, in line with analysts' forecasts.
"GE's earnings came in line, and they didn't say anything earth shattering," said Mike Driscoll, a managing director at Bear Stearns. "The mindset of a lot of investors right now is not so much on the individual numbers, but expectations that companies will either meet or exceed the earnings estimates."
In the latest economic news, a surprise decline in core producer-level prices in June kept alive concerns about deflation -- a broad decline in prices that erodes corporate profits.
The producer price index (search) (PPI) rose more than expected overall, posting a 0.5 percent gain. But excluding volatile food and energy prices, the index posted an unexpected drop of 0.1 percent, according to a government report.
Economists polled by Reuters had expected a PPI gain of 0.2 percent overall and a rise of 0.1 percent excluding food and energy prices.
In another report, the government said the U.S. trade deficit held near-record levels in May as exports struggled to show growth, underscoring the weak global economy.
Volume was moderate, with about 1.2 billion shares changing hands on the New York Stock Exchange and about 1.5 billion shares traded on the Nasdaq. Advancers outnumbered decliners by a ratio of about 11 to 5 on the Big Board, and by about 5 to 3 on the Nasdaq.
The Russell 2000 index, which tracks smaller company stocks, rose 4.74, or 1 percent, to 473.77.
Overseas, Japan's Nikkei stock average finished 3.2 percent lower Friday. In Europe, France's CAC-40 rose 1.3 percent, Britain's FTSE 100 gained 0.7 percent and Germany's DAX index advanced 1.7 percent.
Reuters and the Associated Press contributed to this report.