On Friday, throngs of shoppers descended on stores nationwide in what's become known as Black Friday, one of the most important shopping days of the year for the retail sector as its when many stores actually begin to make a profit for the year. The enthusiasm from shoppers helped investors shelve worries, about the strength of consumer spending, which fuels about two thirds of the economy.
In company news. E Trade surged 25 percent on speculation that it could be taken over. A number of retail stocks, including Wal-Mart, Target and Best Buy rallied. The biggest gainer in the sector was Circuit City, which soared 19 percent.
Financial stocks gained across the board, including JP Morgan Chase and Morgan Stanley both adding about 3 percent, while Lehman Brothers jumped over 5 percent.
GlaxoSmithkline added 6 percent on news that its rotavirus drug Rotarix guards against the five most common types of the virus.
Boeing added more than 2 percent after KLM Royal Dutch Airlines placed an aircraft order with the company worth about $716m.
Among Tech stocks, Barry Dillers IAC/InterActiveCorp fell about 1 percent. Diller said the company plans to invest $100m to expand its services in China.
Oil prices turned higher after retreating from the $100 a barrel in the morning. US light, sweet crude for December delivery rose 99 cents to $98.28 a barrel on NYMEX.
The dollar hit a 2 1/2 year low against the yen and touched another record low versus the euro.
This week brings a packaged schedule of economic news. Consumer confidence comes on Tuesday, existing home sales Wednesday, new home sales and a preliminary reading on GDP Thursday, and personal income and spending is expected Friday.
Japanese stocks gained today after a newspaper report that the Chinese government's investment arm was likely to buy Japanese stocks, boosting hopes for new demand for the underperforming market. Beaten down financial stocks including Mitsubishi UFJ Financial Group shot up after a Wall Street rebound by retailers and banks on Friday. A robust start to the US holiday shopping season, providing some reassurance about the health of the US economy, buoyed Sony Corp and other high tech exporters as well as auto makers such as Honda Motor Co.
Citing unnamed company sources, the Nikkei business daily reported today that China Investment Corp, Beijings new $200bn sovereign wealth fund, had began trying to recruit strategies specialising in Japanese stocks and other investment products.
The Nikkei closed 246.4 points higher at 15135.2.
UK stocks closed higher on Friday, as mining stocks were boosted by merger and acquisition talk, while oil stocks fell despite steady crude prices. The FTSE100 closed 106.8 points higher at 6262.1 as US markets rose on retailers after the Thanksgiving holiday on Thursday and ahead of its early 1900 GMT close.
UK mining stocks featured among FTSE100 gainers, accounting for over 42 points for the index rise, as traders cited market talk of Chinese bid interest in Vedanta Resources. Vedanta added 7.2 percent, declined to comment. Antofagasta added 7.1 percent, Rio Tinto climbed 7.9 percent and Xstrata was 5.2 percent higher. One trader said there was vague market talk Xstrata is weighing a bid for Anglo American. Xstrata declined to comment. Anglo American added 6.1 percent, also boosted by a HSBC rating change to overweight from neutral.
Oil stocks were mixed as crude prices recovered slightly from earlier lows. Royal Dutch Shell fell 1.6 percent, while BG Group was 0.4 percent lower. BG Group pulled out of a deal, announced only two days ago, to buy a 51 percent stake in the Ukranian gas assets of Regal Petroleum.
HSBC added 1.2 percent after its chairman said the company has no plans to withdraw from the US, but will not make any big US acquisition. US activist investors Knight Vinke said the bank's bonus scheme for senior executives is legally void as it stepped up its campaign against Europe's biggest bank. Dresdner raised its rating on HSBC to buy from add. Barclays, RBS, Lloyds TSB, Northern Rock and Alliance and Leicester gained between 2 and 7 percent.
UK housebuilders also supported, after traders said the sector had been oversold in recent sessions with many stocks trading at up to four year lows. Barratt Developments added 5.4 percent and Taylor Wimpey climbed 7.8 percent.
Mitchells and Butlers climbed 7.2 percent on vague talk of a stake build in the company, ahead of its preliminary final earnings next week. Mitchells declined to comment.
DSG International rose 7.7 percent as traders cited recent overselling and hopes of a festive shopping boost.
Centrica fell 2.2 percent to top the FTSE100 losers as traders cited a placing by Citi of 17.3m shares.
Biffa added 24.8 percent after private equity firms Montagu and HgCapital said they had approached the board of Biffa on Sept 4 about a possible cash offer for the company but had been rejected. Montague and HgCapital said in a statement they were committed to pursuing an investment in Biffa and the bid vehicle formed for the purpose of making the offer currently holds s stake of 2.4 percent in Biffa.
Rio Tinto is due to unveil its defence strategy against BHP Billitons proposed takeover today.