NEW YORK ( TheStreet) -- The Dow Jones Industrial Average shot past 13,000 Friday after eurozone leaders stepped up their pledges to preserve the single-currency bloc.
A day after ECB President Mario Draghi said he would do "whatever it takes" to hold the eurozone together, German Chancellor Angela Merkel and French President François Hollande issued a joint statement declaring their determination to do the same. In addition Bloomberg reported Draghi plans to meet with Bundesbank President Jens Weidmann in the next few days to discuss ECB bond purchases.
The risk-on euphoria was also boosted by growing chatter about the possibility of the Federal Reserve tipping its hand on additional stimulus measures at next week's policy meeting as well as a solid round of earnings reports and domestic data.
The Dow closed up 188 points, or 1.46%, at 13,075.66, its first finish above 13,000 since May 7. At its session peak of 13,117.74, the blue-chip index was within 21 points of its 2012 high. For the week, the Dow gained 1.97%, putting it up 7.02% for the year."The words from several European leaders this week suggesting they will do 'whatever it takes' to save the euro and the region's economies has strongly-bolstered risk appetite," said Andrew Wilkinson, chief economic strategist at Miller Tabak. Jeffrey Sica, president and chief investment officer of Sica Wealth Management, expressed some skepticism about the rhetoric of Europe's leaders though. "Central bankers do not have the ability to do 'whatever it take' to save the euro," he said. "They only have the ability to undermine their credibility by making promises they cannot keep." Stocks were also being buoyed by consensus-topping blue-chip earnings from Merck (MRK) and Chevron (CVX), a U.S. GDP report that included an upward revision and a better-than-expected read on consumer sentiment. All 30 Dow components finished higher. The biggest percentage gainers were Alcoa (AA), Caterpillar (CAT), Hewlett-Packard (HPQ), JPMorgan Chase (JPM) and Merck; all rising more than 3%. The S&P 500 advanced nearly 26 points, or 1.91%, to close at 1386. The benchmark index surged 1.71% on the week and is now up 10.21% so far in 2012. The Nasdaq Composite jumped 65 points, or 2.24%, to settle at 2958. The tech-heavy index rose 1.11% for the week and is now sitting pretty with a 13.55% year-to-date gain. The consumer cyclicals, financials and capital goods sectors saw the heaviest buying, although every sector was in the green. Winners outpaced losers by a more than 5-to-1 ratio on the New York Stock Exchange and a 3-to-1 ratio on the Nasdaq. Aside from the global stimulus hopes, the market also took some solace after the Commerce Department said the U.S. economy grew by an annual rate of 1.5% in the second quarter following an upwardly revised 2% increase in the first quarter. The advance estimate came in above some expectations and was in line with forecasts provided by economists in a Thomson Reuters poll.