NEW YORK (Oct 17): U.S. stocks extended their rebound from this month's bruising selloff on Friday, giving the S&P 500 its best day in over a week, as worries about the U.S. earnings outlook eased, but the S&P 500 still posted its fourth straight week of declines.

The S&P 500's streak of weekly losses was its longest since August 2011, and the index still is off 6.2 percent from its Sept. 18 record high. The drop follows worries over the health of the global economy, the spread of the Ebola virus, as well as factors including lower oil prices and uncertainty about the Federal Reserve's next steps.

However, the broad index this week steered clear of correction territory, a 10-percent drop from its high.

Friday's earnings offset some of the concerns about the impact of weak global demand on U.S. corporations. Honeywell shares gained 4.3 percent to $90.06 after results. General Electric shares rose 2.4 percent to $24.82 on its earnings.

The S&P 500 posted its biggest one-day percentage gain since Oct. 8 and some investors said the recent selloff may have run its course.

"This should be it. The market should do well once we get by some of these geopolitical risks that are on top of us right now, the Ebola thing and the mid-cycle elections," said Michael Mullaney, chief investment officer at Fiduciary Trust Co in Boston, which oversees more than $11.3 billion.

"I would think the market is going to be strong into the close this year."

Small caps closed lower. The Russell 2000 index was down 0.4 percent after a three-day streak of more than 1 percent gains, its best since July 2012. The index gained 2.8 percent for the week.

The Dow Jones industrial average rose 263.17 points, or 1.63 percent, to 16,380.41, the S&P 500 gained 24 points, or 1.29 percent, to 1,886.76 and the Nasdaq Composite added 41.05 points, or 0.97 percent, to 4,258.44.

For the week, the Dow and S&P were down 1 percent while the Nasdaq was down 0.4 percent.

Housing shares were among the day's best performers after a Wall Street Journal report said Fannie Mae and Freddie Mac are close to an agreement that could boost mortgage lending. Shares of D.R. Horton rose 6.2 percent to $21.56, while shares of Toll Brothers gained 2.5 percent to $31.23.

Also lifting the sector were increases in U.S. September housing starts and permits.

The S&P energy index was up 0.9 percent, helped by shares of Schlumberger, up 3.7 percent to $93.97. The world's largest oilfield services company's third-quarter profit beat estimates.

The largest percentage gainer on the S&P 500 was Mead Johnson Nutrition, up 9.9 percent to $100.23, after sources told Reuters that French food giant Danone has decided to pursue a takeover. The largest percentage was Urban Outfitters, down 14.3 percent at $29.62, after it warned on its sales.

About 8.4 billion shares changed hands on U.S. exchanges, close to the 8.5 billion average for the month to date, according to BATS Global Markets.