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By Evelyn Cheng, CNBC

U.S. stocks closed higher Friday, extending the rally that followed the Federal Reserve's well-received policy decision earlier in the week.

The Dow Jones industrial average traded more than 100 points higher with Goldman Sachs and JPMorgan Chase among the top contributors to gains in afternoon trade. The index traded about 1 percent higher year-to-date after closing in positive territory for 2016 on Thursday.

"Part of it's options expiration and the aftermath of the Fed — people trying to get their arms around what it means," said Marc Chaikin, CEO of Chaikin Analytics.

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The S&P 500 attempted to trade in the green for the year so far, and was about 4 percent below its 52-week intraday high in afternoon trade. Health care topped financials to lead S&P advancers, while telecommunications was the greatest laggard.

Financials and health care are the only two S&P 500 sectors negative year-to-date.

"Right now I think it's more momentum building on the upside. The breadth of the market has improved significantly," said Bruce Bittles, chief investment strategist at RW Baird.

As of morning trade, 38 S&P 500 stocks, including Verizon, hit new 52-week highs and none touched new lows.

U.S. crude oil futures for April delivery settled down 76 cents, or 1.89 percent, at $39.44 a barrel. Oil briefly topped $41 a barrel in morning trade. The U.S. oil rig count showed a rise of one rig according to Baker Hughes.

Read More: U.S. Future Lower, Dow in Danger of Snapping 4-Day Win Streak