Earnings reports drive stocks up

A broad rally swept through the stock market Friday after McDonald’s and several other large companies reported solid earnings. The Standard & Poor’s 500 index closed higher for the third straight week, its best run since February, as hope builds that a weekend meeting will bring European leaders closer to easing the region’s debt troubles.

The Dow Jones industrial average jumped 267.01 points, or 2.3 percent, to 11,808.79. The Dow is now up 2 percent from where it started 2011. Before Friday’s surge, it was down for the year. The Dow has risen for four weeks straight, the first time that has happened since January.

The combination of stronger earnings, better economic news and a sense that European officials were taking the debt crisis more seriously have helped lift stocks, said Phil Orlando, chief equity market strategist at Federated Investors. “It seems like there’s a greater sense of urgency to deal with Greece and the sovereign debt trouble in Europe,” Orlando said.

McDonald’s Corp., Chipotle Mexican Grill Inc. and Harman International Industries Inc. were among the companies that beat analysts’ expectations. The quarterly earnings season is off to a strong start. Of the 118 companies that reported earnings so far, 75 percent have beaten estimates, according to financial data provider FactSet.

The encouraging corporate news was in line with recent signs that the U.S. economy strengthened in September after a very weak summer. On Friday the government said unemployment fell last month in half of U.S. states and was unchanged in 11. That’s much better than in August, when unemployment rose in 26 states.

The S&P 500 gained 22.86 points, or 1.9 percent, to 1,238.25. Rising stocks in the S&P outpaced falling ones by a margin of 20 to 1: Only 23 companies traded lower.

The Nasdaq composite index gained 38.84, or 1.5 percent, to 2,637.