updated 11/15/2004 9:24:03 AM ET 2004-11-15T14:24:03

Wall Street capped a third straight winning week with a rally Friday, advancing as a new retail sales report and a fresh reading of consumer confidence showed that Americans are growing more confident about the economic outlook.

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The latest Commerce Department report said retail sales rose 0.2 percent in October, a respectable gain considering that automobile sales dropped 2.2 percent. Without auto sales, retail sales would have been up a healthy 0.9 percent, although lack of spending on such big-ticket items worried some investors.

Stabilizing crude oil futures once again helped stocks. A barrel of light crude settled at $47.32, down 10 cents, on the New York Mercantile Exchange.

“The retail report, along with oil and the elections and the economy, they’ve all contributed to a very nice run we’ve had, and should continue to have through the end of the year,” said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers in Boston. “But oil, in particular, could still be a problem. It’s been driven by demand, not by problems with supply, and a big spike in demand or a big supply problem on top of that could be a big shock to the system.”

The Dow Jones industrial average rose 69.17 points, or 0.7 percent, to 10,539.01 — its best close since April 6. The index also climbed back into positive territory for the year.

The Nasdaq composite index, full of technology stocks, rallied 24.07 points, or 1.2 percent, to 2,085.34, posting its best showing since Feb. 11. And the broader Standard & Poor’s 500-stock index rose 10.69 points, or 0.9 percent, to close at 1,184.17, its best closing level since Aug. 24, 2001. The S&P 500 index had hit its first post-9/11 high at Thursday's close.

Wall Street finished its third straight week in positive territory thanks to broad buying across all sectors. While the post-election rally continued, the exuberance of investors in the past two weeks was replaced by more caution, though lower oil prices and a reassuring statement from the Federal Reserve helped fuel steady buying.

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The Dow gained 1.5 percent for the week, while the S&P 500 index rose 1.5 percent and the Nasdaq climbed 2.3 percent.

Analysts said Friday’s retail sales figures showed that consumers’ view of the economy was improving just in time for the holiday shopping season. That was confirmed by the University of Michigan’s consumer sentiment index, which posted a preliminary 95.5 reading for November, up from 91.7 in October and far better than the 93 reading Wall Street had expected.

The Commerce Department report boosted retail stocks, with discount retailer Target Corp. rising $1.25 to $52.02 and Dow component Wal-Mart Stores Inc. climbing 23 cents to $56.85. Shares of major automakers were mixed on the report. Ford Motor Co. lost 2 cents to $14.23, while General Motors Corp. was up 31 cents at $40.21.

Dell Inc. gained $3.19 to $40.44 after the computer manufacturer posted record third quarter sales and a 25 percent increase in profits. The company’s results were in line with Wall Street estimates. Dell also said it would see $60 billion in annual revenues by 2006, a year ahead of schedule. The company’s confidence could help revive flagging interest in computer stocks overall, analysts said.

“It wasn’t necessarily the numbers that got them moving, it was their tone and confidence in their report,” said Keith Keenan, vice president of institutional trading at Wall Street Access. “Dell has managed to become the Wal-Mart of the PC space, with excellent service and really low costs. They’re proving you can turn a serious profit.”

Pixar Animation Studios Inc., producer of “Finding Nemo” and “The Incredibles,” beat Wall Street’s profit forecasts by 14 cents per share on the strength of its home video sales. Pixar surged $6.60 to $86.54.

Overseas, Japan’s Nikkei average surged 1.6 percent. In Europe, Britain’s FTSE 100 gained 0.4 percent, France’s CAC-40 rose 0.03 percent for the session, and Germany’s DAX added 0.3 percent.

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