U.S. STOCKS, BOND MARKETS

The Dow average powered past the 13000 mark as investors celebrated signs Europe's leaders are taking action to address the region's debt troubles.

The Dow Jones Industrial Average gained 187.73 points, or 1.5%, to 13075.66, closing above 13000 for the first time since May 7. The Standard & Poor's 500-stock index advanced 25.95 points, or 1.9%, to 1385.97, and the Nasdaq Composite added 64.84 points, or 2.2%, to 2958.09.

European Central Bank President Mario Draghi is trying to win over European policy makers on a plan to strengthen the euro zone's financial health, according to news reports.

U.S. stocks accelerated Friday's gains on the news, which said that Mr. Draghi will meet with the head of Germany's Bundesbank in coming days, and that he is also discussing the potential for bond purchases, further interest-rate cuts and long-term loans to banks.

The reports of Mr. Draghi's plan were preceded by statements of support Friday for the euro zone from German Chancellor Angela Merkel and French President Francois Hollande. Their expression of unity extended a late-week rally sparked when Mr. Draghi pledged to preserve the euro Thursday.

Companies posted second-quarter earnings reports that ranged from positive to dismal. On the brighter side, Expedia Inc. shares climbed after the online-travel service company beat second-quarter expectations and raised its quarterly dividend.

Facebook Inc. shares fell after the social-networking giant's revenue growth beat analyst expectations, but still slowed sharply. The company also failed to provide investors with any concrete guidance about its future performance.

The Commerce Department's initial reading of U.S. second-quarter gross domestic product was mostly in line with expectations.

The measure showed annualized growth of 1.5%, better than the 1.3% expected by economists.

The measure showed a slowdown from the first quarter's upwardly revised rate of 2%. In other corporate news, Merck & Co. led gains among blue chips, rising 4.1% after the pharmaceutical company reported better-than-expected second-quarter earnings and revenue, affirmed its full-year earnings outlook and said it remained on track to seek approval for six new products in 2013.

EUROPEAN STOCKS, BONDS

European stocks ended higher Friday, boosted by hopes European officials will take action to bring down Spanish and Italian borrowing costs after German Chancellor Angela Merkel and French President Francois Hollande vowed to protect the euro zone.

Equities were also buoyed as data showed the U.S. economy slowed less than expected in the second quarter.

Erasing early-morning losses, the Stoxx Europe 600 index added 1.3% to close at 259.81, ending the week with a 0.6% gain. Thursday, the index jumped 2.5% after European Central Bank President Mario Draghi pledged "to do whatever it takes to preserve the euro."

On Friday, French daily Le Monde, citing unnamed sources, said the ECB and European leaders were preparing joint action to bring down Spanish and Italian borrowing costs.

Under the plan, the rescue funds would be used to buy government bonds in the primary market, while the ECB would resume purchases of bonds in the secondary market.

German Chancellor Angela Merkel and French President Francois Hollande released a joint statement Friday saying they were determined to do "everything possible to protect the euro zone." Spanish and Italian bond yields continued to drop.

The yield on the 10-year Italian government bond declined 12 basis points to 5.94%, according to electronic trading platform Tradeweb. In Spain, the yield on 10-year paper fell 21 basis points to 6.71%.

Stocks in those countries also rallied. The Italian FTSE MIB index jumped 2.9% to 13,596.88, with UniCredit SpA surging 6%. On the week, the index gained 4.1%.

Spain's IBEX 35 index closed 3.9% higher to 6,617.60, up 5.9% on the week, partly boosted by heavyweight Banco Santander SA, up 6%. Greece also got pulled into the euro-zone debt spotlight, as Reuters reported that European policy makers were looking at ways to cut the country's debt, with the ECB and national central banks taking losses on their holdings of Greek government bonds.

The Athens General Index rose 0.5% to 586.26. Elsewhere, shares of European Aeronautic Defence & Space Co. jumped 5.7%. The group raised its full-year outlook as second-quarter earnings rose sharply, beating forecasts.

Heading the other direction, French materials group Compagnie de Saint-Gobain SA gave back 11%, as it reported a 34% drop in first-half profit and said it expects the economic environment to remain tough in the back half of the year.

Total SA rose 3.4%. The oil group said it remains confident about the second half of 2012 and reported a 2% rise in adjusted second-quarter profit.

The CAC 40 index rose 2.3% to 3,280.19, closing out the week with a 2.7% gain. Banks rallied, with Barclays PLC up 8.7%, posting one of the biggest gains for the sector.

The bank reported underlying first-half profit above market expectations and apologized for the recent interest-rate-rigging scandal.

The FTSE 100 index rose 1% to 5,627.21, but ended the week 0.4% lower. Miner Anglo American PLC weighed on the index, down 3.6%, after posting lower earnings. In Germany, the DAX 30 index rose 1.6% to 6,689.40, gaining 0.9% on the week. Deutsche Bank AG gained 3.1% and Commerzbank AG picked up 1.8%.

ASIA-PACIFIC STOCK MARKETS

Asian markets rose Friday on reassurance from European Central Bank President Mario Draghi that "the ECB is willing to do whatever it takes to preserve the euro," while South Korea was the strongest performer as Samsung Electronics reported record profit.

Friday's gains helped some markets recover from weak sessions earlier in the week: South Korea's Kospi finished the week 0.3% higher, with it and Japan's Nikkei creeping back into positive territory for the year.

The next step will be to see whether the ECB will deliver, as attention shifts to the central bank's policy meeting. There are also rising hopes that the U.S. Federal Reserve could also undertake more monetary stimulus when the Federal Open Market Committee meets. South Korea led the gains, with the Kospi up 2.6% to 1829.16.

The main contributor to the Kospi's rise was index heavyweight Samsung Electronics, which announced a record net profit for the second quarter. Its shares rose 5.2%.

Japan's Nikkei gained 1.5% to 8566.64, lifting shares in major exporters such as Honda Motor, which gained 3.8%, and semiconductor manufacturer Tokyo Electron, which closed 4% higher.

In China, the Hang Seng Index advanced 2% to 19274.96, as large Chinese banks outperformed the broad market gains, reversing some of the weakness caused by the recent interest rate cuts and concerns over asset quality. Index heavyweight HSBC also gained 2.6%, recovering some more from heavy selling earlier in the week.

The Shanghai Composite was 0.1% higher at 2128.76. In company news, Toshiba gained 4.9% in Tokyo after a Nikkei report said that strong performance in its infrastructure segment helped push the company's April to June operating profit higher.

Also in Japan, Nissan Motor gained 2.8%, despite reporting a smaller-than-expected first quarter operating profit, as investors bought amid expectations that the company's earnings are expected to bottom in the first half.

COMMODITIES

Base metals closed higher but mostly rangebound on the London Metal Exchange Friday, as macroeconomic newsflow was met with a muted reaction from investors.

At the PM kerb close, LME three-month copper was up 1.3% at $7,564 a metric ton. Lead made strong gains, closing 2.1% higher at $1,923/ton. U.S. GDP annual growth of 1.5% between April and June was neither weak enough to spark hopes for imminent stimulus, nor strong enough to convince the market that the U.S. economy is on the road to recovery, leaving metals investors nonplussed.

Market participants are likely to focus on the upcoming Federal Open Market Committee meeting for hints of further monetary stimulus. Crude-oil futures edged upward Friday despite mediocre U.S. financial indicators after the euro zone garnered its latest vote of confidence from key European political leaders.

Front-month crude-oil futures at the New York Mercantile Exchange settled at $90.13 a barrel, up 74 cents, or 0.8%. Front-month Brent futures settled at $106.47 a barrel, up $1.21. Oil and other investments received an upward bump Friday after German Chancellor Angela Merkel signaled strong support for the euro.

Ms. Merkel and French President Francois Hollande pledged Friday to do their utmost to protect the euro zone and said they were deeply committed to the integrity of the currency bloc.

Gold futures climbed for a third-consecutive day, finishing at a three-week high as the euro gained on optimism about Europe's banking crisis. The most-actively traded contract, for August delivery, rose $2.90, or 0.2%, to settle at $1,618 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest ending price since July 3. Compiled from MORRISON SECURITIES PTY. LTD.