NEW YORK (Reuters) - U.S. stocks climbed on Friday, led by retailers as the holiday shopping season kicked off in earnest, while oil closed at a record back above $98 a barrel.
Gold came close to $826 an ounce, making a run back toward a recent 28-year high, and the dollar recovered from a record low against the euro.
U.S. crude oil for January delivery CLF8 settled at a record $98.18 a barrel, up 89 cents, or almost 1 percent, after heating oil futures hit an intraday record on weekend forecasts of cold weather in the U.S. Northeast.
Trading was anemic, however, in abbreviated market sessions in the U.S. the day after the Thanksgiving Day holiday and with Japanese markets closed for a holiday.
Retailers such as Target (TGT.N) helped push stocks higher as consumers, many with the day off of work, loaded up their shopping carts during "Black Friday" -- the name for the day after Thanksgiving when many retailers once turned a profit on the strength of Christmas sales and went into the black for the year.
The Dow Jones industrial average .DJI jumped 181.84 points, or 1.42 percent, to close at 12,980.88, while the Standard & Poor's 500 Index .SPX gained 23.93 points, or 1.69 percent, to finish at 1,440.70. The Nasdaq Composite Index .IXIC advanced 34.45 points, or 1.34 percent, to end at 2,596.60.
For the week, stocks fell. The blue-chip Dow average declined 1.5 percent, the broad S&P 500 slipped 1.2 percent and the Nasdaq shed 1.5 percent.
But for the year, all three major U.S. stock indexes have held onto their gains so far: The Dow is up 4.2 percent, the S&P 500 is up 1.6 percent and the Nasdaq is up 7.5 percent.
Earlier in the day, the FTSEurofirst 300 index .FTEU3 of top European shares shot up 1.52 percent, or 22.13 points, to close at 1,476.16, after a gain of 0.7 percent on Thursday.
The dollar was little changed after hitting various new lows early on Friday and briefly coming close to $1.50 to the euro as concerns about the U.S. economy rattled investors.
The dollar was down against a basket of major trading-partner currencies, with the U.S. Dollar Index .DXY down 0.04 percent at 75.04 from a previous session close of 75.073.
The euro EUR= was down 0.13 percent at $1.4834 from a previous session close of $1.4853 -- and well below its record high of $1.4966 set earlier in the session, according to Reuters data.
Against the Japanese yen, however, the dollar JPY= was down 0.29 percent at 108.20 yen from a previous session close of 108.52.
A gloomy prognosis for the euro zone from a European Central Bank member toppled the euro well off its high of $1.4966, a new record.
Bank of Spain Governor and European Central Bank council member Miguel Angel Fernandez Ordonez said while there were some medium-term inflation risks in the euro zone, world financial turmoil threatened a stronger-than-expected slowdown.
"The comments reemphasize that while the market has been preoccupied with U.S. economic weakness, the U.S. is not alone in suffering and the euro zone will struggle or at least decelerate next year as well," said Jeremy Stretch, market strategist at Rabobank.
U.S. government debt traded mixed, with the rally in the stock market pulling investors' interest -- and cash -- away from Treasuries with shorter maturities.
The 2-year note US2YT=RR was down 3/32 in price for a yield of 3.07 percent, up from 3.02 percent late on Wednesday. In contrast, the benchmark 10-year U.S. Treasury note US10YT=RR was up 3/32, with the yield at 4.01 percent, down from 4.02 percent late on Wednesday. Bond prices move inversely to their yields.
The U.S. Treasury market and the U.S. stock market were closed on Thursday for Thanksgiving.
Some analysts were wondering whether a recent bond rally, driven by fears of further fallout among financial companies from a global credit crisis, was approaching an end.
"Daily technical momentum indicators are all quite overbought -- they have been for some days now -- and we're likely to hear technical types start to fret that the end is nigh for the bond rally," said William O'Donnell, a strategist at UBS. He added, however, that "our dim, and dimming, fundamental outlook for the U.S. economy will keep us from falling into that trap."
Spot gold prices XAU= surged to a session high of $825.70, its highest since November 12, as the dollar's weakness prompted gold bulls to make a fresh run toward the recent 28-year high of $845.50 reached in early November. The record for spot gold is $850, hit in January 1980.
COMEX most-active gold for December delivery GCZ7 leaped $26.10, or 3.3 percent, to settle at $824.70 an ounce in New York. This was the biggest single-day percentage gain for a COMEX front-month gold futures contract since February 21.
Additional reporting by Jennifer Coogan, Kristina Cooke, Gene Ramos, Ellen Freilich, Nick Olivari and Frank Tang in New York, and Jeremy Gaunt in London; Editing by Jan Paschal