Stocks rally as global tensions ebb, score weekly gains

|By:, SA News Editor

Stocks rebounded with strong gains following the S&P 500's largest drop in three months, as investors decided the geopolitical tensions that stoked so much worry yesterday now appeared contained.

Google's strong Q2 report served as a bellwether for internet-related stocks, which enjoyed big gains and helped the Nasdaq to a 1.5% jump; the Nasdaq biotech index climbed 3%, and the small-cap Russell 2000 Index rose 1.4%.

The Dow was driven by gains in all but one of its 30 components; the notable laggard, which reported Q2 results that failed to wow investors, was GE.

Markets are holding up well despite global events, says Columbia Management's Jeff Knight: "A few years ago, you would have had contagion every time you had a bad news story... now there's more confidence in the system."

A total of 744M shares traded at the NYSE, which was heavier than average due to options expiration activity.

Treasury prices fell, with the yield on the benchmark 10-year note rising one basis point on the day at 2.487%.