US stocks closed higher Friday on renewed confidence that the US Federal Reserve stimulus program would continue.
Stocks also got a lift from a bullish report on German business sentiment and from an earnings report from Dow member Hewlett-Packard, which surged 12.3 percent higher.
The Dow Jones Industrial Average jumped 119.95 (0.86 percent) to 14,000.57.
The broad-based S&P 500 gained 13.18 points (0.88 percent) to reach 1,515.60, while the tech-rich Nasdaq Composite Index rose 30.33 points (0.97 percent) to 3,161.82.
Speculation that the Federal Reserve would end its aggressive bond-buying program in 2013 had driven stock markets lower both Wednesday and Thursday.
But on Friday, more investors began to conclude that the market had "misinterpreted" Fed meeting minutes that discussed ending the program in 2013, said Peter Cardillo of Rockwell Global Capital.
Cardillo expected Federal Reserve Chairman Ben Bernanke to reaffirm the quantitative easing program in congressional testimony next week.
St. Louis Federal Reserve President James Bullard told CNBC that the Fed's loose monetary policy will remain in effect for "a long time."
Analyst Patrick O'Hare of Briefing.com called Bullard's comments "an early buying catalyst."
Stocks also gained support after the German Ifo business climate index notched its strongest gain in two and a half years, hitting its highest level since April 2012.
With only a handful of exceptions, the blue-chip Dow index moved higher. Besides Hewlett-Packard, big movers included Coca-Cola (up 2.2 percent), American Express (up 1.7 percent) and Home Depot (up 1.9 percent).
Insurer American International Group late Thursday posted a $4 billion loss, yet reported better-than-expected operating earnings. AIG rose 3.1 percent.
Texas Instruments, a semiconductor company, picked up 5.2 percent after announcing a 33 percent increase in its dividend and $5 billion in share buybacks.
Abercrombie & Fitch sank 4.5 percent as the clothing retailer's tepid guidance for 2013 earnings offset an increase in the company's dividend.
Bond prices rose. The yield on the 10-year bond fell to 1.97 percent from 1.98 percent, while the 30-year fell to 3.16 percent from 3.17 percent. Bond prices and yields move inversely.