NEW YORK — U.S. stocks climbed Friday, capping their best week in nearly 12 months, as optimism ahead of the second-quarter earnings season powered a strong rebound from the market’s worst levels this year.
The Dow Jones industrial average closed up about 60 points, or 0.6 percent, to 10,198.03.
Alcoa Inc. rose 2.1 percent ahead of its second-quarter report due Monday and put in the best performance of a Dow component this week.
The Dow has climbed 5.3 percent for the week, its best weekly performance since the week that ended July 17, 2009.
The four-day rally represents a bounce-back after the Dow sank the previous week to its lowest point since October in its worst five-day performance leading up to July 4 since 1896. The rally comes as investors have grown hopeful that the market’s recent drop to 2010 lows may have exaggerated expected effects on corporate earnings from the slumping euro and slower global growth.
“The earnings are expected to again beat expectations as they have the past couple quarters, but what they’re looking for is the guidance,” said Roy Williams, chief executive of Prestige Wealth Management. “That will be the big indicator.”
Williams said he expects the earnings season to be positive for the stock market if it can return investors’ focus to U.S. corporate fundamentals from the global concerns, especially regarding the euro zone, that have hurt the market in recent months.
“My hope is the earnings will improve the psyche of the individual investor,” he said. “We do face challenges, and we’re going to have a lot of volatility, but … the economy is continuing to grow.”
The Nasdaq composite rose 1 percent on Friday, bolstered by a 2.4 percent jump in Google Inc.
The materials sector led the measure’s gains, while financial and consumer-discretionary stocks were also strong. Consumer staples were the only category in the red.
