Stocks gained on Friday, resuming a buying spree into a second day, as news of the biggest increase in retail sales in four months tempered concern the economy is slowing.
The Dow Jones industrial average closed up 125.71. or 1.13%, at 11,269.02; the S&P 500 rose 6.17, or 0.53%, closing at 1,178.81; and the Nasdaq composite was up 15.30, or 0.61%, to close at 2,507.98. All numbers are preliminary.
Although closing in positive territory, stocks pared gains earlier in the session. The Dow had been up 200 points at midday.
For the week, the Dow was down 175.59.
The 0.5% increase in U.S. retail sales reported by the Commerce Department Friday followed a 0.3% increase in June that was larger than previously estimated. Excluding auto sales, purchases rose more than projected.
Stocks briefly erased gains after a report showed that confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment slumped to 54.9 from 63.7 the prior month.
About $2.3 trillion was erased from U.S. equity values in the last three weeks as Europe's debt crisis, signs the economy is slowing and S&P's downgrade of the federal government's AAA credit rating left the benchmark gauge for U.S. shares within 11 points of a bear market. Both European shares and the Russell 2000 index of small U.S. companies entered a bear market this week, falling at least 20% from their previous highs.