NEW YORK -- U.S. stocks rose Friday, sending the Dow Jones industrial average to a record, as drug makers rallied on merger activity and investors speculated economic growth will accelerate.
Health-care companies in the Standard & Poor's 500 index jumped 0.8 percent to help lead the advance amid a takeover offer for Shire. CarMax climbed 17 percent after quarterly results topped forecasts as increased customer traffic boosted vehicle sales. Oracle slid 4 percent after profit and sales fell short of analysts' estimates.
The S&P 500 increased 0.2 percent to 1,962.87, completing its best weekly gain in two months. The gauge gained for six consecutive days, its longest winning streak since April. The Dow added 25.62 points, or 0.2 percent, to 16,947.08. Both measures climbed to all-time highs. The Nasdaq composite index advanced 0.2 percent.
"This is an energy-bunny sort of market that wants to keep marching higher, and for a good reason," Terry Sandven, chief equity strategist at Minneapolis-based U.S. Bank Wealth Management, which oversees $120 billion, said by phone. "The U.S. economy is showing varying signs of improvement. Earnings are rising, interest rates are low and inflation is elevated, but not at extremes. That's a favorable environment for equi
ties to march higher."
Trading in S&P 500 companies was 53 percent above the 30-day average amid a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire. About 7.7 billion shares changed hands in the U.S., the most since April 15.
Equities rallied this week after Fed Chair Janet Yellen said accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above- trend growth. Yellen emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.
The S&P 500 is trading at 16.6 times the projected earnings of its members, up from 15.5 times at the beginning of the year.
The gauge capped an advance of 1.4 percent for the week, its biggest in two months. It is up 8.1 percent since a low on April 11 as data showed the economy is recovering from the impact of extreme weather earlier this year.
Reports on Thursday showed the Fed Bank of Philadelphia's factory index unexpectedly climbed in June and a Labor Department release showed claims for unemployment benefits dropped more than expected.
The Chicago Board Options Exchange volatility index, the gauge of S&P 500 options prices known as the VIX, rose 2.2 percent to 10.85. The measure is trading near its lowest level since 2007.
The best U.S. stocks this month are ones that just a few months ago were the biggest losers. Netflix, Tesla Motors and TripAdvisor have rallied more than 17 percent in the past four weeks, recouping most of the losses from a rout during March and April. The Nasdaq composite index reached a 14- year high this week and the Russell 2000 index is less than 2 percent from a record. Both fell at least 8 percent earlier in 2014.
Five out of 10 main industries in the S&P 500 advanced Friday. Energy and health-care companies had the best performance, while consumer discretionary and utility shares slumped the most.
Drug companies rallied amid merger activity. AbbVie is considering raising its takeover bid for Shire a fourth time after the European drugmaker rejected its latest offer for about $46.5 billion, said two people with knowledge of the matter. AbbVie slipped 1.6 percent to $53.30.
Cross-border deals are accelerating as U.S. companies seek lower taxes and ways to spend almost $2 trillion protected from U.S. taxes in cash abroad. Merck & Co. increased 1.1 percent. Eli Lilly & Co. jumped 3.6 percent, Alexion Pharmaceuticals rose 3.6 percent and Amgen climbed 2.7 percent.
CarMax added 17 percent to $52.75. Demand for autos has risen with an improving job market, more housing starts and low interest rates. That drove the annualized pace for new light- vehicles sales, adjusted for seasonal trends, to 16.8 million last month, the fastest rate since February 2007, according to Autodata.
AutoNation rallied 5.2 percent to $59.42.
Oracle slid 4 percent to $40.82. Fiscal fourth-quarter profit and sales fell short of estimates as Salesforce.com and other cloud-computing rivals lure customers away.
Darden Restaurants fell 3.9 percent to $47.58. The seafood and Italian restaurant chain owner reported fiscal fourth-quarter profit and revenue that trailed analysts' estimates as sales at Oliver Garden continued to slump.
Merrimack Pharmaceuticals lost 11 percent to $7 after the biotechnology company said it has reached an agreement with French drugmaker Sanofi to regain the right to develop and commercialize its cancer treatment MM-121.