The Dow Jones industrial average ended up 267.01 points, or 2.3 percent, at 11,808.79, closing near its highs of the session. All but two of 30 components ended higher, led by Travelers Cos. and American Express Co.

McDonald's was among the big gainers, with shares rising 3.7 percent, after the restaurant chain reported a nearly 9 percent gain in earnings, helped by a boost in sales both in the U.S. and Europe. The stock tapped an intraday high of $92.45 before closing at a record.

"Stocks are being driven by strong earnings, economic numbers that aren't awful, and hope that Europe won't be a disaster," said Matthew Tuttle, chief investment officer at Tuttle Wealth Management in Stamford, Conn.

So far in the third-quarter earnings season, 75 percent of companies have reported earnings per share above estimates. That's roughly in line with the 74 percent that beat in the past four quarters, according to FactSet.

Wall Street, however, was cool to a handful of bellwether stocks following results.

General Electric Co. shares fell 1.9 percent, leading Dow decliners, after the financial and industrial conglomerate matched but did not top Wall Street views, a first since 2008, and analysts noted a slower growth in industrial orders.

Microsoft Corp. edged up 0.4 percent after the tech company reported results largely in line with analysts' expectations.

With Friday's gains, the Dow quit a choppy 10-session stretch of sessions when it closed in a different direction from each of the prior sessions. The Dow has now closed higher for two days. The index climbed 1.4 percent for the week to log its fourth-straight week of gains -- the longest stretch since January.

The Nasdaq composite ended up 38.84 points, or 1.5 percent, at 2,637.46. It slid 1.1 percent for the week, its first down week in three.

The S&P 500 gained 22.86 points, or 1.9 percent, to 1,238.25. A 2.8 percent rally in consumer discretionary stocks led gains for all 10 industry groups as Harman International Industries and Chipotle Mexican Grill shares surged after both companies reported results.

For the week, the S&P 500 gained 1.1 percent, its third week of gains, the longest weekly winning stretch since February.

The S&P 500's financial sector ended higher Friday, extending a rally in European bank stocks as investors took some confidence from a joint statement Thursday that Germany and France were devising a comprehensive rescue plan to be discussed at the E.U. summit Sunday. Read More