In a week that saw the Dow swing more than 450 points, including a gain of 283 points in Thursday's session alone, investors grappled with unease over soured subprime loans and the broader economy before casting off such concerns and bidding stocks higher amid signs consumers might yet again pull through and give Wall Street reason to climb higher.

On Friday, investors seemed upbeat about earnings and takeover activity and appeared only slightly disappointed by the Commerce Department's report that retail sales dropped 0.9 percent last month, following a 1.5 percent jump in May. The June figure was weaker than anticipated and marked the steepest decline in nearly two years.

"I think investors are overstating their moves on a day-to-day basis but over the long term we continue to trend upward," said Brian Levitt, corporate economist at OppenheimerFunds Inc. "I think that is reasonable given the strong global quality picture and the strong global growth picture."

The Dow rose 45.52, or 0.33 percent, to 13,907.25 after reaching a new trading high of 13,932.29.

Relief that Alcoa won't pursue a deal with Alcan Inc. helped the Dow Friday, as did solid quarterly results from General Electric Co., which sent the conglomerate's stock above $40 during trading and to a five-year high.

For the week, the Dow rose 295.57 points, or about 2.2 percent. Its three-day gain following sharp losses Tuesday was the Dow's biggest percentage increase since a rise of 3.17 percent over three sessions in May 2005 and its biggest point gain since early 2003, when the Dow added 405.74 points.

Broader stock indicators also advanced Friday. The Standard & Poor's 500 index rose 4.80, or 0.31 percent, to 1,552.50. The index late in Friday's session set a fresh trading high of 1,555.10, topping a previous record of 1,553.11 set in March 2000. The S&P added 1.4 percent for the week.

The Nasdaq composite index gained 5.27, or 0.20 percent, to 2,707.00 after spending much of the session moderately lower; the week's gain totaled 1.5 percent. Though the Nasdaq was trading at levels not seen since early in the decade, the index remains well short of its closing record of 5,048.62, set in March 2000 when it was bloated by the late 1990s tech boom.

On Friday, an upbeat report on the mood of consumers released after trading began seemed to inject the market with additional confidence. The Reuters/University of Michigan index of consumer sentiment increased to a six-month high of 92.4 for mid-July from 85.3 in June.

The reading followed Thursday's session in which the stock market surged after strong sales reports from a few U.S. retailers gave investors a reason to be optimistic about consumer spending and the upcoming deluge of second-quarter earnings results.

Investors abroad were also in a buying mood Friday. In European trading, Germany's DAX index of blue chip stocks hit a new all-time high, breaking through a seven-year-old record. The DAX finished up 0.49 percent. Elsewhere, Britain's FTSE 100 rose 0.28 percent and France's CAC-40 rose 0.24 percent.

In Asian trading, Japan's Nikkei stock average rose 1.42 percent; Hong Kong's Hang Seng Index rose 1.27 percent to a new record; and China's often volatile Shanghai Composite Index slipped 0.04 percent.

Treasury bond prices rose, with the yield on the benchmark 10-year note falling to 5.10 percent from 5.13 percent late Thursday. The dollar was mixed against other major currencies and still trading at a record low versus the euro and 26-year low against the British pound. Gold prices fell.

Light, sweet crude rose $1.43 to $73.93 per barrel on the New York Mercantile Exchange.

Buyout activity -- or the possibility of further deals -- appeared to help buoy stocks Friday and perhaps helped stave off a pullback. Often after big jumps in stocks, investors are tempted to cash in gains and stand back as the market consolidates. But a Standard & Poor's analyst said that after Rio Tinto's bid for aluminum producer Alcan beat out Alcoa's offer, Alcoa is now a more attractive takeover target. Alcan slipped 95 cents to $97.50, while Alcoa jumped $2.06, or 4.6 percent, to $47.35, making it the best performer among the 30 stocks that make up the Dow industrials.