Stocks in major world markets rose to a two-month high on Friday and the dollar ticked up, boosted by views that the European Central Bank may provide more stimulus to the euro zone economy.
Oil prices rose nearly 2 percent as traders covered short positions after four days of losses and the US oil rig count fell for a seventh straight week.
On Wall Street, the benchmark S&P 500 index rose for a third consecutive week, a streak not seen since May. General Electric helped buoy the index for the day with a 3.4 percent gain after the company reported quarterly results, but other industrials like Honeywell fell.
"Right now, the trade is a risk relief rally, people buying back the risk they sold earlier in the month," said Paul Zemsky, chief investment officer, multi-asset strategies and solutions at Voya Investment Management in New York.
With earnings in view, Zemsky said, "Expectations have been depressed so far it seems almost certain we’ll have a positive surprise."
The Dow Jones industrial average rose 74.22 points, or 0.43 percent, to 17,215.97, the S&P 500 gained 9.25 points, or 0.46 percent, to 2,033.11, and the Nasdaq Composite added 16.59 points, or 0.34 percent, to 4,886.69.
The pan-European FTSEurofirst 300 index closed up 0.7 percent. For the week, the index was little changed, after a 4.4 percent advance the preceding week.
An MSCI gauge of stocks in top world markets rose 0.4 percent to close at its highest since mid-August.
Euro soft, Yen pares weekly gains
Annual inflation in the euro zone turned negative in September due to sharply lower energy prices, maintaining pressure on the ECB to increase its asset purchases to boost prices.
The euro fell 0.3 percent to $1.1346 and was little changed for the week.
"In the near term, the dollar could gain further against the euro as there's more speculation about more (quantitative easing) from the ECB," said Lee Ferridge, State Street Global Markets' head of macro strategy, North America, in Boston.
Against the yen, the greenback advanced 0.5 percent to 119.42, though it was the yen's strongest week in the past six.
The dollar index, which values the greenback against a basket of six major counterparts, was up 0.4 percent.
Oil prices rose, with traders closing short positions after a sharp drop this week and reflecting a further decline in the US rig count.
The December contract for Brent, the new front month for the global crude benchmark, was up 1.3 percent from its Thursday settlement, trading above $50 a barrel. US crude's front-month contract was up 1.9 percent at $47.26 per barrel.
For the week Brent fell 4.3 percent and WTI lost 4.8 percent.
US 30-year Treasury yields dipped on views that the outlook for inflation appeared weak.
Benchmark 10-year Treasury notes were down 4/32 in price to yield 2.0351 percent, from 2.021 percent late Thursday.
London copper fell 0.4 percent and spot gold was down 0.5 percent.