NEW YORK (CNNMoney.com) -- Stocks rallied Friday at the end of a choppy week on Wall Street, as investors welcomed falling oil prices and soothing comments from a Federal Reserve official regarding inflation and interest rates.

The Dow Jones industrial average (up 60.67 to 11,392.11, Charts) and the Nasdaq composite (up 10.50 to 2,165.79, Charts) both gained 0.5 percent, according to early tallies.

The broader Standard & Poor's 500 (up 4.90 to 1,298.92, Charts) index climbed 0.4 percent.

Treasury prices rose, lowering the corresponding yields and the dollar gained versus other major currencies. Oil and gold prices slumped.

With no major economic reports issued Friday, investors took their lead from comments delivered by Cleveland Fed president Sandra Pianalto earlier in the day which helped send major gauges higher.

Pianalto said in a speech that while inflation was worrisome, the slowing economy will help counter it, echoing the Fed's comments from its most recent policy meeting.

Investors largely overlooked more bad news from the real estate sector as Lennar Corp. (down $0.54 to $42.71, Charts) became the latest homebuilder to issue a earnings warning, saying its third-quarter earning would fall short of expectations.

Earlier this week, both KB Home (down $0.05 to $40.35, Charts) and Beazer Home (down $0.09 to $37.24, Charts) warned Wall Street of earnings shortfalls.

Crude oil prices slumped for the sixth consecutive session Friday, providing support for stocks in the process. U.S. light crude oil for October delivery fell $1.07 to $66.25 a barrel on the New York Mercantile Exchange.

Also adding support: an afternoon report from the Fed that showed U.S. consumer credit climbed by a less-than-expected $5.54 billion in July. Analysts polled by Reuters were expecting consumer credit to rise $7.5 billion.

Majors gauges fell Wednesday and Thursday on worries that the Federal Reserve may resume its interest rate hike campaign on revived inflation fears. In a speech delivered Thursday, San Francisco Federal Reserve president Janet Yellen said the Fed may need to keep raising rates due to rising inflation.

"It's been a tough week," said Tom Schrader, managing director of U.S. equity trading at Legg Mason. "There hasn't been a lot of direction or economic numbers and we still have a lot of people coming back from vacation or taking their kids to school."

Historically speaking however, stocks typically stumble coming into September, as it is often the worst month of the year for stocks.

Schrader said that next week could be more interesting, as reports on retail sales and consumer prices are both slated for release later in the week.

After the close, it was revealed that Ford Motor (Charts)'s new chief executive will receive $18.5 million in one-time compensation for joining the automaker.

Broadcom (down $0.34 to $26.09, Charts) shares slipped after it said it found more errors in the way it accounted for past stock options. As a result, the chipmaker said it will have to book at least twice as much as it had previously thought in additional stock-based compensation costs.

Shares of the credit reporting bureau Equifax (up $3.92 to $36.34, Charts) soared more than 12 percent Friday after the company upped its earnings forecast for 2006.

AirTran Holdings Inc. (down $1.19 to $9.48, Charts), the parent company of the low-cost carrier AirTran Airways, slumped 11 percent after the company trimmed its revenue outlook for the third quarter due to weakened travel demand.

In other corporate news, Hewlett Packard (up $0.75 to $36.17, Charts) admitted late Thursday it had acquired the phone records of nine journalists in an effort to locate the source of a boardroom leak, according to various news reports.

HP Chairman Patricia Dunn, who has been under fire for her handling of the investigation, said she was not aware of tactics used in the leak investigation and that she had no plans of stepping down, Reuters reported.

Market breadth was positive and volume was moderate. On the New York Stock Exchange, winners beat losers five to three as 1.31 billion shares changed hands. On the Nasdaq, advancers beat decliners by eight to seven as 1.48 billion shares changed hands.

Treasury prices rose, lowering the yield on the 10-year note to about 4.77 percent from 4.78 percent late Thursday. Bond prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and the yen.

COMEX gold for December delivery closed $7.60 lower at $61.30 an ounce.

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