A surge in oil and gas companies pulled the stock market out of a five-day slump on Friday, as the price of crude swung higher.
Oil prices jumped after the International Energy Agency predicted drillers would cut production this year. Exxon Mobil, Chevron and other energy companies led all 10 sectors of the Standard & Poor's 500 index to gains, climbing 3%. Oil's seven-month slide had cut its price by more than half.
“Lower oil prices on the whole are supportive of economic growth worldwide,” said Jason Pride, director of investment strategy at Glenmede Trust. “They're very helpful for Japan, Europe, China and India. It's clearly a good thing.”
The S&P 500 index gained 26.75 points, or 1.3%, to finish at 2,019.42.
The Dow Jones industrial average climbed 190.86 points, or 1.1%, to close at 17,511.57, and the Nasdaq rose 63.56 points, or 1.4%, to 4,634.38.
The rally came at the end of another rough week for the market. Since the start of the year, worries about the strength of the global economy and falling oil prices have weighed major indexes down. Even with its strong performance on Friday, the S&P 500 still lost 1% for the week, its third straight weekly drop.
“There has been a lot of conflicting information to digest, recently,” said Anastasia Amoroso, a global market strategist at J.P. Morgan Asset Management.
Amoroso said the big question has been whether the recent slump in oil prices will lead to other problems, such as deflation, a downward spiral in prices that could put companies out of business. “Are low oil prices a good or a bad thing?” she asked, rhetorically. “For stocks, deflation is not so great.”
Benchmark U.S. crude jumped $2.44 on Friday to settle at $48.69 a barrel in New York trading. Brent crude, a benchmark for international oils used by many U.S. refineries, added 31 cents to $50.17 in London.
The economic reports out Friday offered investors some encouragement. U.S. manufacturers churned out more furniture, computers and clothing in December, according to the Federal Reserve, as factory production increased for a fourth straight month in a row. In a separate report, a gauge of consumer sentiment from the University of Michigan jumped to its highest level in 11 years.
A fall in trading revenue pulled down Goldman Sachs's quarterly earnings 10%. The investment bank's fixed income, currency and commodities division slumped 29%. Goldman's stock dipped $1.26, or 0.7%, to $177.23.
It was a recurring theme for a week in which JPMorgan Chase, Bank of America and other big banks turned in results that missed analysts' forecasts. Overall, analysts predict that big corporations will post earnings growth of 4%, according to S&P Capital IQ. Sales are expected to rise just 2.1%, largely the result of falling revenue for oil companies.
Most major markets in Europe closed with solid gains. Germany's DAX and France's CAC 40 climbed 1.3%. Britain's FTSE 100 rose 0.8%.
A move by the Swiss National Bank on Thursday rippled through currency markets, after the central bank ditched its policy to cap the rise of the Swiss franc. Following the news, the Swiss franc spiked against both the euro and the dollar. Switzerland's stock market sank again on Friday, losing 6%.
The move in the Swiss franc rocked brokerages that deal in foreign currencies. FXCM, a New York-based brokerage, said late Thursday that its big losses may have put the company in breach of regulatory requirements. FXCM's stock plunged ahead of the opening bell before trading in its shares was suspended.
In the bond market, U.S. Treasury prices fell, driving the yield on the 10-year Treasury note to 1.83%.
Precious and industrial metals extended their recent run. Gold gained $12.10 to settle at $1,276.90 an ounce, while silver rose 65 cents to $17.75 an ounce. Copper inched up 6 cents to $2.62 a pound.
In other trading on the New York Mercantile exchange:
— Wholesale gasoline rose 6 cents to close at $1.359 a gallon.
— Heating oil rose 4.3 cents to close at $1.666 a gallon.
— Natural gas fell 3.1 cents to close at $3.127 per 1,000 cubic feet.