NEW YORK (Reuters) - Stocks scored their first back-to-back weekly gains since early July on Friday, on strong Google (GOOG.O) earnings and as investors kept riding the optimism for a solution to the euro zone’s debt crisis.
The gains put the Dow industrials and the Nasdaq back into positive territory for the year, marking a dramatic reversal from two weeks ago, when the threat of a Greek default and sour U.S. data had buyers running from the market.
“There are these positive catalysts that may be in place -- earnings being one and a more formalized policy action out of Europe,” said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.
The benchmark S&P index has climbed 14 percent from the October 4th intraday low of 1,074.77, which had temporarily tipped it into bear market territory. Now investors are looking to see if stocks can sustain a move above the 1,215-1,220 area that has been upper end of the market’s range since early August.
For the week, the Dow rose 4.9 percent, while the S&P 500 jumped 6 percent and the Nasdaq climbed 7.6 percent.
Google Inc (GOOG.O) led the Nasdaq higher on Friday as shares jumped 5.9 percent to $591.68, a day after its results sailed past Wall Street’s expectations, helped by strong advertising sales and cost controls.
“To the extent earnings come through as expected or better than expected, which we think is more likely to be the case, then that will provide sufficient support for the equity markets,” Trunow said.
The Dow Jones industrial average .DJI was up 166.36 points, or 1.45 percent, at 11,644.49. The Standard & Poor's 500 Index .SPX was up 20.92 points, or 1.74 percent, at 1,224.58. The Nasdaq Composite Index .IXIC was up 47.61 points, or 1.82 percent, at 2,667.85.
Apple rose 3.3 percent to $422, just below its intraday lifetime high of $422.86 set on September 20, as the newest version of its iPhone went on sale across the country.
The CBOE Volatility Index, or VIX.VIX, fell 8 percent to end at 28.24, and closed lower for the ninth day in a row, a pattern suggesting more gains could be in store as investors find less need for protection against losses.
“This has only happened four other times in the last 15 years and each time following this decline, the market over the next two months went up or stayed flat,” wrote Jay Pestrichelli, co-founder and principal of Zega Financial LLC, an investment advisory firm specializing in option strategies.
French and German officials are trying to put flesh on the bones of a crisis resolution plan in time for a European Union summit on October 23, overshadowing Standard and Poor’s cut of Spain’s credit rating, a move that underlined the challenges facing Europe’s finance ministers.
Stronger-than-expected retail sales data added to the upbeat mood Friday.
U.S. retail sales rose 1.1 percent in September from a month earlier, a report showed, beating the median forecast in a Reuters poll of a 0.7 percent rise. Sales growth during August was revised upward to 0.3 percent.
About 6.6 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq for the day, well below the year’s daily average so far of about 8 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 5 to 1, and on the Nasdaq, advancers outpaced decliners by 3 to 1.
Reporting by Caroline Valetkevitch; Additional reporting by Doris Frankel; Editing by Jan Paschal