Buying Builds Momentum as Bank, Tech Stocks Rally

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U.S. stocks posted solid gains Friday as Wall Street looks to gain back some of this week's heavy losses and traders cheer rallying bond prices in Europe.

Today's Markets

As of 11:17 a.m. ET, the Dow Jones Industrial Average rose 68.65 points, or 0.58%, to 11937.00, the Standard & Poor's 500 Index gained 11.64 points, or 0.96%, to 1227.39 and the Nasdaq Composite soared 35.14 points, or 1.38%, to 2576.58.

The gains were led by the financial and technology sectors, which responded to the news out of Europe, upbeat earnings from Adobe Systems (NASDAQ:ADBE) and high hopes for the initial public offering of Zynga (NASDAQ:ZNGA). However, the rally lost some steam as Zynga's stock quickly broke below its IPO price.

The early rally comes after a slew of upbeat economic reports on Thursday helped put a stop to Wall Street's three-day slump. Still, even with the two days of gains, the markets remain on track end the week deeply in the red.

In Europe, which continues to be the main driver of global financial markets, the euro posted modest gains after Italy's lower chamber of Parliament approved a crucial package of measures aimed at easing its debt crisis by reassuring the jittery bond markets. After falling to 11-month lows earlier this week, the euro was recently up 0.45% to $1.3074. In another sign that pressure is easing a bit in Europe after this week's earlier turbulence, European bonds, especially with shorter maturities, rallied.

Encouraged by the relative calm in Europe, the euro-sensitive financial stocks like Morgan Stanley (NYSE:MS) and Jefferies (NYSE:JEF) climbed more than 2%.

The Nasdaq Composite outperformed its peers in the wake of a pair of mixed earnings reports that were released after Thursday's close. While Adobe rallied around its earnings beat, BlackBerry maker Research in Motion (NASDAQ:RIMM) plunged more than 11% due to its sobering results and a disclosure of another key product delay.

However, the tech-sector gains were limited by Zynga, which quickly broke below its IPO price after becoming the largest U.S. Internet IPO since Google (NASDAQ:GOOG) in 2004. Zynga priced at $10, the high end of the expected range, and briefly hit $11 before fading.

On the economic front, Wall Street received relatively benign data on inflation. The Commerce Department said U.S. consumer prices were unchanged month-over-month in November, compared with forecasts for a slight rise of 0.1%. Excluding food and energy, prices at the consumer level gained 0.2%, slightly hotter than estimates for 0.1%.

In the commodities complex, crude oil fell 8 cents a barrel, or 0.05%, to $93.99. After plunging over the prior four days to five-month lows, gold was up $20.40 a troy ounce, or 1.31%, to $1,597.80.

Corporate Movers

Zynga (NASDAQ:ZNGA) priced its initial public offering of 100 million shares at $10 each, coming in at the upper end of the expected range of $8.50 to $10.

United Rentals (NYSE:URI) inked a $1.87 billion deal to acquire rival equipment rental company RSC Holdings (NYSE:RRR) in a cash-and-stock deal aimed at combining forces and creating synergies. The transaction carries a 58% premium on RSC's Thursday close.

Darden Restaurants (NYSE:DRI) disclosed an in-line 28% drop-off in profits due to deteriorating sales at its Olive Garden restaurants. Revenue increased 6.1% to $1.83 billion, matching estimates.

Global Markets

The U.K.'s FTSE 100 jumped 0.60% to 5433.41, the German DAX slipped 0.08% to 5725.82 and the French CAC 40 added 0.04% to 2999.950.

In Asia, Japan's Nikkei 225 gained 0.29% to 8401.72 and Hong Kong's Hang Seng leaped 1.43% to 18285.40.