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Dow Adds Almost 200 Points

NEW YORK ( TheStreet) - Stocks rallied Friday as the Dow Jones Industrial Average finished close to 200 points higher and the major U.S. equity indices nabbed weekly gains of more than 2%.

Promising durable goods data and technical momentum helped spur the buying spree.

The Dow Jones Industrial Average added 198 points, or 1.9%, to 10,860, marking a weekly rise of 2.4%. Roughly flat for the week headed into Friday's session, the S&P 500 gained 24 points, or 2.1%, to 1,149. Meanwhile, the Nasdaq finished the week 2.8% higher, closing up by 54 points, or 2.3%, at 2,381 on Friday.

Ralph Fogel, head of investment strategy at Fogel Neale Partners, sees a combination of technical and fundamental reasons behind why the market is paying more attention to the good news than bad news.

"Technically, the market has had a head-and-shoulder bottom so we've been waiting for the market to break out and it did," Fogel said. "It pulled back a little bit but then bounced back - even disappointing jobless claims didn't cave the market. The S&P 500 remained above 1130. From a technical standpoint, that's pretty powerful. So all it took was some good news today -- with durable goods orders that were a little bit of a surprise -- for the market to take off. So the technical underpinnings are there."

"On a fundamental basis," he added, "I think people are starting to wake up to the fact that they can get 2% and change from 10-Year Treasury bonds or they can buy Johnson & Johnson (JNJ) and get a 3.5% yield with the potential for upside."

Earlier, the Commerce Department said durable goods orders declined 1.3% in August after rising 0.7% in the previous month. The decline was slightly lower than the 1.4% drop anticipated by economists, according to Briefing.com. Excluding transportation, orders grew 2% after slumping 3.7% in July. Analysts were expecting only a 0.5% bump.

On the Dow, Caterpillar (CAT), Alcoa (AA) and Boeing (BA) put in the best performance while AT&T (T), Johnson & Johnson (JNJ) and Bank of America (BAC) had the mildest gains.

New-home sales remained unchanged in August at 288,000, disappointing economists' expectations for a rise to 291,000, according to Briefing.com.

New Homes

Homebuilder KB Home (KBH) saw its stock climb 3.4% to $12.11 after it narrowed its quarterly loss and beat expectations with a loss of 2 cents a share.

Comments from Oracle (ORCL) at an analyst meeting indicating that it would consider buying a chip company had shares across the chip sector jumping. The SPDR S&P Semiconductor ETF (XSD) gained 4.2% to $45.07.

NBC Universal CEO Jeff Zucker plans to leave his position after Comcast (CMCSA) completes its takeover of NBC. Shares of NBC parent company General Electric (GE) traded 3.2% higher at $16.66 while Comcast's stock advanced 3.6% to $18.57.

Shares of American Axle & Manufacturing (AXL) surged 3.5% to $9.16 following its announcement of a joint venture with Saab Automobile to deliver vehicle fuel efficiency components.

BHP Billiton (BHP) got approval from the U.S. Federal Trade Commission to go ahead with its attempt to takveover Potash (POT). The FTC green light comes just two days after Potash sued BHP in U.S. federal court in an effort to block their bid. Potash shares gained 0.4%, to $146 and BHP's stock rose 2.6% to $75.96.

Shares of Netflix (NFLX) jumped 1.1% to $162.21 on news that it will expand its licensing agreement with NBC to allow users to stream prior TV series from its cable and broadcast networks.

Novartis (NVS) signed an agreement to sell the U.S. rights to Enablex, a treatment for symptoms of an overactive bladder, to Warner Chilcott (WCRX) for $400 million. Shares of Novartis climbed 2.2% to $57.54 while Warner Chilcott's stock finished 0.6% higher at $22.60.

HSBC (HBC) CEO Michael Geoghegan will step down at the end of the year and will be replaced by Stuart Gulliver, head of the group's investment bank. The stock was up by 1.7% at $52.61.

In commodity markets, November crude gained $1.31, or 1.7%, to settle at $76.49 a barrel. The December gold contract was up by $1.80, or 0.1% to settle $1,298.10 an ounce.

The dollar traded lower against a basket of currencies with the dollar index down by 1.1% while the benchmark 10-year Treasury note weakened 16/32, lifting the yield to 2.607%.

Overseas, Hong Kong's Hang Seng gained 0.3% while Japan's Nikkei shed 1%. The FTSE in London added 0.9%, and the DAX in Frankfurt rose by 1.8%.

--Written by Melinda Peer in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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