Stocks Vaulted Higher by Afternoon Rally

Meanwhile, Delta Air Lines (DAL Quote) said in a regulatory filing that waning demand has prompted it to cut back on future flight capacity, and shares tumbled 2.9% to $6.82.

In other company news, discount retailer Wal-Mart (WMT Quote) said Mike Duke, vice chairman of its international division, would replace CEO Lee Scott when he retires in February. The stock ended the day up 4.5% at $52.92.

Shifting to commodities, crude oil for January delivery added 51 cents to settle at $49.93 a barrel. Gold climbed $43.10 to settle at $791.80 an ounce.

After roaring higher Thursday, longer-dated U.S. Treasury securities were plummeting in price. The 10-year was losing 1-21/32 to yield 3.17%, and the 30-year was down 3-18/32, yielding 3.66%. The dollar was rising vs. the yen but falling against the euro and pound.

Mary Ann Hurley, vice president of fixed-income trading for D.A. Davidson, said that as stocks made marginal gains, bond prices came down as Thursday's flight-to-quality bid trade was unwinding. "We never should have gone up to that extreme yesterday, so to see profit-taking occur today is not surprising at all," she said.

Overseas, European exchanges, such as the FTSE in London and the DAX in Frankfurt, were trading lower. In Asia, Japan's Nikkei and Hong Kong's Hang Seng finished on the upside.