The strongest sectors in the broad market were basic materials, energy and consumer cyclicals. Health care, utilities and consumer non-cyclicals were the only groups in the red.

Volume was healthy on Friday, totaling more than 5 billion on the New York Stock Exchange and 1.98 billion on the Nasdaq. Winners were ahead of losers by roughly 2-to-1 ratios on both the Big Board and Nasdaq.

Brian Gendreau, market strategist at Cetera Financial Group, noted the track record for buying equities while the Fed is engaged is executing a quantitative easing program is very good since the financial crisis, saying the S&P 500 rose 36.4% during QE1 and 10.2% during QE2.

"Other matters, such as the impending fiscal cliff and Europe's continuing troubles could, of course, work in the other direction, but the additional liquidity from QE3 will be viewed as a source of support for the market by investors, in my view," he said.

Gendreau expects this third round of stimulus to have a lesser impact on the economy than previous bond-buying programs though. Long-term interest rates are already at such low levels that going down a few basis points further is unlikely to have a big impact on household or corporate borrowing and investing decisions, he said.

The international and commodity markets rallied as well Friday, while Treasuries and the dollar declined sharply.

The FTSE in London was up 1.57% and the DAX in Germany was gaining 1.31%. The Hong Kong Hang Seng index settled up 2.90% and the Nikkei in Japan finished up 1.83%.

The benchmark 10-year Treasury plunged 1 10/32, raising the yield to 1.871%. The greenback tumbled 0.53%, according to the dollar index.

October crude oil futures added 69 cents to settle at $99 a barrel and December gold futures rose 60 cents to settle at $1,772.70 an ounce.

If you liked this article you might like

Forecast for S&P 500, Dow Industrials Remains Bullish, These Charts Show

Dow 20,000! It Should Mean Nothing to Investors, but Then Again...

Tradebird Investors Are Bullish on U.S. Stocks but Bearish on the Euro

Why Home Depot and Boeing Stock Fell Tuesday