In a sign of the breadth of the buying on Friday, volatility dropped nearly 10.2% as tracked by the CBOE's VIX and there were six trades in advancing shares for each in a declining share on the New York Stock Exchange. The yield on the U.S. 10-year bond jumped 0.73-percentage point to 1.652% as traders ditched the safe-haven asset class.

A Sigh of Relief

After days of trepidation leading up to the European Union summit, traders were finally able to breathe at least a temporary sigh of relief on Friday. The European Council said in a statement early Friday that is "imperative to break the vicious circle between banks and sovereigns." 

As a result, it is planning several moves aimed at easing embattled eurozone credit and financial markets. One of the most important components is the introduction of a single bank regulator that would work with the European Central Bank and oversee the bloc's banks.