Stocks end week at 2016 highs as oil rises

A powerful rally sent stocks to their highest point of the year Friday as oil prices jumped and investors continued to assess the European Central Bank's additional stimulus measures.

The Dow Jones industrial average gained 218 points, or 1.3%, to close at 17,213. The Standard & Poor's 500 index gained 1.6% and the Nasdaq composite index gained 1.9%.

The strong end to a week that saw the bull market celebrate its seventh anniversary left the Dow and S&P at their highest closes since the end of 2015. That was just before Wall Street opened 2016 with the stock market's worst start ever for a year.

Now, exactly a month after the stock market appeared headed for its first bear market since the financial crisis, stocks have almost wiped out their losses for 2016, with the Dow and S&P down 1.2% and 1.1%, respectively, for the year.

The Nasdaq is still trailing a bit, down 5.2% for 2016, but Friday's rally lifted out of correction territory, meaning it is now down less than 10% from its 2015 record close again.

The impetus for the surge in stocks came from oil, which rallied after the International Energy Agency said “there are signs that prices might have bottomed out.”

In its monthly oil market report, the Paris-based organization that represents the world’s major oil-consuming nations, said supplies dropped in February by 180,000 barrels per day. But it also noted a sharp slowdown in demand growth, particularly in the United States and China.

U.S. benchmark crude oil rose 1.7% to $38.50 while Brent crude was up 0.9% to $40.41.

IEA: Oil 'might have bottomed out'

Earlier, European markets rallied as Germany's DAX rose 3.2%, France's CAC 40 jumped 3.1% and Britain's FTSE 100 was 1.7% higher.

Stocks in Europe had fallen Thursday on comments by ECB chief Mario Draghi that underscored the weakness of the 19-country eurozone economy and the desperation of monetary authorities to act.

But they rebounded  Friday as investors digested the raft of measures announced. They included three interest rate cuts, loans to banks, and an expansion to a bond-buying stimulus program. Shares in banks, which will be supported by the ECB loans, were among the biggest gainers on Friday.

ECB cuts deposit rate further into negative territory

Asian stock markets were higher despite turbulence brought on by the ECB announcement.

Japan’s Nikkei 225 index gained 0.5% to close at 16,938.87 while Hong Kong’s Hang Seng index rose 1.1% to 20,199.60. The Shanghai composite index rose 0.2% to finish at 2,810.31.

U.S. stocks gave up early gains Thursday after reacting bullishly to the ECB's move to cut interest rates further into negative territory and increase its year-old bond-buying program. But the gains faded after ECB president Mario Draghi said it is unlikely rates will be pushed lower from current levels,

Contributing: Adam Shell, Associated Press