Stocks closed higher Friday after a quiet, pre-holiday session that turned the S&P 500 index positive for the year.
Traders were relieved by news that Congress extended a payroll tax holiday for workers and emergency unemployment benefits. The programs were set to expire at the end of the year. Letting that happen would have reduced economic growth by about 1 percent, analysts said.
The final business day before Christmas also was the slowest full day of trading so far this year. Traders exchanged just 2.2 billion shares, about half of the recent average. The market will be closed on Monday because Christmas falls on a Sunday this year.
A series of mixed economic reports Friday failed to derail that optimism. The Standard & Poor's 500 index added 11.33 points, or 0.9 percent, to 1,265.33. It started the year at 1,257.
The Dow Jones industrial average rose 124.35 points, or 1 percent, to 12,294. Bank of America Corp. was the Dow's biggest gainer, adding 2.4 percent. All but two of the 30 Dow stocks rose, Alcoa Inc. and Boeing Co.
The Dow has risen 527.74 points, or 4.5 percent in the past four days.