Stocks surged higher Friday as another round of corporate takeovers prodded investors to continue a largely uninterrupted months-long buying streak. The Dow Jones industrial average registered its 24th record close this year and the Standard & Poor's 500 index came within striking distance of its all-time high.
Beyond the buyout news, which has lent buoyancy to the markets for months, a stronger-than-expected reading on consumer sentiment helped investors set aside some concern that consumers unnerved by higher gas prices would pull back on spending and upend the economy's smooth slowdown.
The latest takeover news, including deals involving marquee names like General Electric Co. and Microsoft Corp., signaled that the enormous amount of liquidity that has lubricated global stock markets in recent months doesn't appear on the verge of evaporating.
The Dow rose 79.81, or 0.59 percent, to 13,556.53. The blue chips set a new trading high of 13,558.48, having crossed 13,500 for the first time on Thursday. The Dow has risen in 30 of the last 36 sessions.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 10.00, or 0.66%, to 1,522.75, its highest level in more than six years. The index came within fewer than 5 points of its record close of 1,527.46, set in March 2000.
The Nasdaq composite index rose 19.07, or 0.75%, to 2,558.45.
For the week, the Dow rose 1.73%, its seventh straight week of gains. The recent weekly gains mark the longest streak of wins since an eight-week gain that ended in January 2004. The S&P 500 gained 1.12% and the Nasdaq lost 0.15%.
Investors appeared unfazed by rising oil prices and a Chinese interest rate increase, instead focusing on corporations' continued appetite for merger deals. The Wall Street Journal reported GE is near a deal to sell its plastics division to a Saudi Arabian industrial giant for about $11 billion. GE rose 43 cents to $36.96.
Microsoft struck an agreement to acquire on-line advertising company aQuantive Inc. for about $6b. in cash, paying a premium following a rush of major on-line ad deals by its competitors in recent weeks. AQuantive soared $27.92, or 77.8%, to $63.79, while Microsoft slipped 15 cents to $30.83.
The buyout news came alongside favorable economic findings. The preliminary Reuters/University of Michigan index of consumer sentiment for May came in at 88.7. Wall Street had expected the reading would be unchanged from April at 87.1.
Stocks climbed strongly, with markets hitting fresh multi-year highs as oil producers extended their rally from the previous session, though airline stocks showed some weakness after British Airways swung to a loss.
The UK FTSE 100 Index added 0.9% to 6,640.90, its highest level since September 2000.
The French CAC 40 index climbed 1.2% to 6,101.14 and the German DAX 30 index rose 1.4% to a seven-year high of 7,607.54.
Shares in British Airways lost 2.9% after the airline swung to a quarterly loss.
Most Asian markets retreated Friday after rallying in the previous session, as Japanese stocks were hit by the overnight decline in London copper prices and Hong Kong shares dropped amid speculation about possible austerity measures in China.
In Hong Kong, the blue chip Hang Seng Index fell 89.77 points, or 0.4%, to 20,904.84 after climbing to a record high Thursday.
Worries about steps China might take to slow its sizzling economy were fulfilled when after the market closed authorities raised interest rates the fourth time in a year. The 0.18% increase takes effect Saturday and will raise lending rates to 6.57% on a one-year loan, the central bank said on its Web site.
China also said it was widening the band in which the yuan is allowed to fluctuate against the dollar each day to 0.5% from 0.3%, a move that would allow the yuan to appreciate.
In Tokyo, the benchmark Nikkei 225 stock index fell for a second straight session, losing 99.02 points, or 0.57%, to finish at 17,399.58 points.
The dollar fell against the yen and most major currencies after China took steps to allow its currency to appreciate faster.
The euro bought $1.3505 in late New York trading, up from $1.3492 late Thursday. The British pound rose to $1.9745 from $1.9743.
The dollar fell to 121.15 Japanese yen after rising as high as 121.39 Thursday, climbing from a nearly three-month low against the dollar.
In other New York trading, the dollar bought 1.0900 Canadian dollars, down from 1.0989.
June gold settled up $4.80 at $662 a troy ounce on the New York Mercantile Exchange. July silver settled up 12 cents at $13.003.
June crude oil settled up 8 cents at $64.94 a barrel and June gasoline settled down 2.89 cents at $2.4077 a gallon.