Morgan Stanley and Wells Fargo & Co. added at least 2.1 percent as European lenders rallied. Alcoa Inc. and Boeing Co. rose more than 2.8 percent, pacing gains in companies most-tied to the economy. McDonald's Corp. climbed 3.7 percent after profit jumped as lower-priced items boosted U.S. store sales. Honeywell International Inc. advanced 5.8 percent as a recovery in commercial aerospace helped earnings climb 44 percent.

The S&P 500 increased 1.9 percent to 1,238.25 as of 4 p.m. New York time, the highest level since Aug. 3. The gauge rose 1.1 percent since Oct. 14, gaining for a third straight week. The Dow Jones Industrial Average climbed 267.01 points, or 2.3 percent, to 11,808.79 today, erasing its 2011 decline.

"There's a sense that Europe will come out with something that will calm down imminent fears of the crisis escalating out of control," James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $360 billion, said in a telephone interview. "Markets are also digesting Federal Reserve lip service given to additional quantitative easing moves. However, it appears most investors are unsure whether additional easing is needed."

Gains accelerated after the S&P 500 climbed past 1,233.10, its intraday peak on Oct. 18 and the highest level since Aug. 4. Three rallies since the U.S. government was stripped of its AAA credit rating by S&P have stopped around 1,220, data compiled by Bloomberg show.

A burst of trading in E-Mini S&P 500 futures occurred today after the index climbed above 1,233.10, according to data compiled by Bloomberg. Volume jumped to 31,774 contracts during 10:17 a.m. New York time, the most for any minute of the day at that point.

"The path of least resistance is higher," Christopher Verrone, head of technical analysis at New York-based Strategas Research Partners, said in a phone interview. "I'm interested to see what happens in the 1,260-1,270 range. That is when we'll get more information on how durable this advance is."

France retreated in a clash with Germany over how to expand the power of Europe's bailout fund after the first meeting in a six-day marathon intended to solve the debt crisis. France's view that the fund, the European Financial Stability Facility, should get a banking license enabling it to borrow from the European Central Bank, "is not a definitive point of discussion for us," French Finance Minister Francois Baroin told reporters today in Brussels. "What matters is what works." Read More