Investors shake off latest North Korea missile test

U.S. stock benchmarks finished in the green on Friday, posting sharp weekly gains, with a big assist from rallying telecommunication and bank shares as Wall Street shook off North Korea's latest missile launch.

The Dow Jones Industrial Average rose 64.86 points, to 0.3%, to close at 22,268.34, logging its fourth straight record close and its sixth consecutive day of gains. For the week, the blue-chip gauge booked a gain of 2.2%, marking its best weekly advance since the week ended Dec. 9, according to FactSet data.

The S&P 500 ended 4.61 points higher, a return of 0.2%, at 2,500.23, on the back of a 0.4% rise in financials, and a 1.8% gain in telecommunications, which is the smallest of the broad-market benchmark's 11 sectors.

The Nasdaq Composite Index rose 19.38 points, or 0.3%, to close at 6,448.47. The Nasdaq registered a weekly advance of 1.4%.

Stocks initially struggled for direction as investors weighed North Korea's decision to fire a missile over Japan for the second time in a month, but soon found firmer footing.

"Investors have been programmed to more or less ignore stuff with Korea. The last two or three times this kind of thing occurred we went down a little, only to turn back higher. We've learned to buy on the dips," said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company.

The Nasdaq was supported by semiconductor stocks. Nvidia Corp (NVDA) gained 6.3% after Evercore ISI raised its price target on the company to $250 from $180. Advanced Micro Devices(AMD) was up 2.1%. Both were among the biggest percentage gainers on the S&P 500. The iShares PHLX Semiconductor ETF(SOXX) rose 1.8% in its fifth straight daily advance, marking its biggest weekly gain since July.

The strength in chip makers offset weakness in Oracle Corp.(ORCL), which fell 7.7% after the software giant's outlook late Thursday came in below Wall Street's expectations.

Gold futures  -- which tend to draw buyers in times of geopolitical tension -- lost ground. The precious metal, which had climbed to around $1,338 an ounce following North Korea's latest move, finished at a September low, down 2% on the week as reaction to perceived risks subsided.

South Korea's Kospi index closed 0.4% higher, bouncing back from an earlier drop, as Asian markets overall finished mixed.

The geopolitical tension comes at a time when investors have become concerned about valuations and there are questions about the pace of economic growth. The latest economic data failed to provide clarity on the state of the economy. U.S. retail sales unexpectedly fell in August, dropping 0.2% in their second decline of the past three months. Separately, the Empire State factory gauge hit 24.4 in September, down slightly.

U.S. industrial output fell 0.9% in August, its first drop in seven months. The Federal Reserve said the decline was mostly due to the recent impact of Hurricane Harvey. The storm also had an effect on consumer sentiment, which fell slightly in August.

"Valuations are stretched, but I don't believe we're in bubble territory. The market can go a lot higher," Morris said. "Recent data have been mixed, but given the storms it's hard to read too much into it."

finished unchanged on the day but posted a weekly advance of 5.1%. European stocks finished down across the board, while the pound hit a fresh 2017 high against the buck, trading above the $1.36 mark following another hawkish signal from the Bank of England.

The ICE U.S. Dollar Index lost ground, but still was up for the week.

--Victor Reklaitis and Sue Chang contributed to this article.