NEW YORK ( TheStreet) -- Major U.S. equity indices approached highs for the year Friday and extended gains on signs the U.S. economy is performing better than expected.
The consumer sentiment index from the University of Michigan's August report came in at 73.6, a three month-high, versus the consensus estimate of 72.4. Leading economic indicators jumped 0.4% in July after a 0.2% dip in the previous month.
Investors were encouraged by European stocks, which increased on expectations the continent's debt problem is contained.
The Dow Jones Industrial Average rose 25 points, or 0.2%, to 13,275, within 5 points of its 2012 closing peak. The blue-chip index gained 0.5% for the week."We continue to be long term, reasonably bullish on equities, and specifically in areas where we think some bigger game changes will occur in the next decade," said Leo Kelly, managing director at HighTower's Kelly Wealth Management. "The problem is short term; there's an enormous amount of uncertainty." Breadth within the Dow was negative with losers ahead of winners, 16 to 14. The biggest percentage gainers were Bank of America (BAC), Caterpillar (CAT - Get Report), Travelers Companies (TRV) and United Technologies (UTX). Caterpillar gained 1.6% after the construction-machinery maker reported that heavy equipment sales at its global dealers sped up in the three months through July. Merck (MRK), Pfizer (PFE) and Intel (INTC) were among the Dow's losers. The S&P 500 added 3 points to close at 1,418. The benchmark index's 2012 closing high, in April, is 1,419. The index finished the week up 0.9%. The Nasdaq finished up 14 points, or 0.5%, to 3,077. It ticked up 1.8% for the week. The strongest sectors in the broad market were consumer cyclicals, financials, technology and capital goods. The weakest sectors were basic materials, healthcare, consumer staples and utilities. Volume came in at 2.9 billion on the New York Stock Exchange and 1.62 billion on the Nasdaq. U.S. stocks jumped Thursday on evidence that the housing industry, which has been in a four-year recession, is coming to life. German Chancellor Angela Merkel's reiteration of European Central Bank President Mario Draghi's vow to do whatever is necessary to save the euro also buoyed stocks, pushing major equity averages to their biggest gains in nearly two weeks. Ten-year Spanish government bond yields were falling sharply Friday on expectations of eventual ECB intervention. Kelly Wealth Management's Leo Kelly said he is encouraged by the recent housing data. It looks like "the beginnings of a turn back