U.S. stocks ended a strong week with a broad rally on Friday as investors lauded GE's decision to divest most of its high-risk GE Capital business and repurchase up to $50 billion of its shares.
All 10 primary S&P 500 sectors ended up on the day but the S&P Industrials index, driven by gains in GE shares, was by far the best performer and rose 1.5 percent.
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General Electric rose 10.8 percent to $28.51, hitting its highest level since September 2008 after it said there was potential to return more than $90 billion to investors through 2018.
Friday marked the biggest one-day jump for the stock, as well as the most active session, since March 2009. More than 351 million shares changed hands, making GE the most active name on the New York Stock Exchange by far. It was also the S&P 500's biggest percentage gainer.
"This is indicative of a broader trend, a refocus on shareholders, and that can provide a support for markets," said David Lebovitz, global market strategist for J.P. Morgan Asset Management in New York. "If we continue to see buybacks and higher dividends, and I suspect we will, that makes a more convincing case for equities going forward."
The Dow Jones industrial average rose 98.92 points, or 0.55 percent, to 18,057.65, the S&P 500 gained 10.88 points, or 0.52 percent, to 2,102.06 and the Nasdaq Composite added 21.41 points, or 0.43 percent, to 4,995.98.
For the week, the Dow is up 1.6 percent, the S&P is up 1.7 percent and the Nasdaq is up 2.3 percent. Both the Dow and S&P notched their second straight week of gains, helped by a pickup in merger activity.
Investors are looking ahead to the first-quarter earnings season. While some companies reported this week, next week will see results from a number major firms, including several banks. Profits of companies on the S&P 500 are projected to have declined by 2.9 percent in the first three months from a year ago, according to Thomson Reuters data.
"There's a bit of a rough patch ahead, but I think we should be able to jump over lower expectations," said Lebovitz, "I don't anticipate a sharp fall in stocks throughout the season."
Advancing issues outnumbered declining ones on the NYSE by 1,782 to 1,232, for a 1.45-to-1 ratio on the upside; on the Nasdaq, 1,603 issues rose and 1,100 fell for a 1.46-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 26 new 52-week highs and no new lows; the Nasdaq Composite was recording 93 new highs and 21 new lows.
About 5.47 billion shares traded on all U.S. platforms, according to BATS exchange data, down from the month-to-date average of 6.22 billion.
(By Ryan Vlastelica; Editing by Chizu Nomiyama)