UK Stocks Lead European Rally, US Faces Volatility

In the U.S., the Dow Jones industrial average was up 33.03 points, or 0.4 percent, at 8,588.63 around midday New York time while the broader Standard & Poor's 500 index rose 5.68 points, or 0.6 percent, to 924.05.

Traders are bracing themselves for heavy volume and bouncy prices because of the occurrence Friday of a quarterly "quadruple witching," which marks the simultaneous expiration of a number of different options and futures contracts. Stocks are more volatile during this period.

Investors have been in a cautious mood for most of the week amid mounting concerns that the recent economic news has not been quite good enough to justify the share rally in stock markets since the middle of March. However, strong U.S. jobs and industrial data Thursday helped ease those concerns and contributed to the solid gains on Wall Street.

The stock market rally around the world since March had been fueled by hopes that the U.S. economy will recover from recession sooner than anticipated. As equities usually start rising 6 to 9 months before actual recovery emerges in the official data, this suggests investors believed the massive sell-off in markets during the most acute phase of the financial crisis was overdone. Some of the world's major equity indexes are now in positive territory for 2009.