A deal to forge stronger ties among most of Europe's economies sent stocks sharply higher Friday as hopes grew that the region was close to resolving its debt crisis.
The Dow closed up 186.56 points, or 1.6 percent, at 12,184.26. It is up 1.4 percent for the week.
Bank stocks led the market higher, reflecting traders' optimism about Europe's progress toward solving its crisis. Citigroup Inc. rose 3.7 percent, Morgan Stanley 3.2 percent and JPMorgan Chase & Co. 3 percent.
Banks have been weighed down for months by fears about their exposure to Europe. If Europe's crisis spins out of control, U.S. banks that do business with their counterparts there would suffer.
The Standard & Poor's 500 index closed up 20.84 points, or 1.7 percent, at 1,255.19. The Nasdaq composite index finished up 50.47, or 1.9 percent, at 2,646.85. The S&P is up 0.9 percent for the week, the Nasdaq 0.8 percent.