Wall Street's earnings boost

NEW YORK (CNNMoney.com) -- Stocks gained Friday morning, restarting the recent advance after a one-day sell-off, as investors welcomed upbeat earnings from Oracle and Nike and kept an eye on the falling dollar and near-record crude oil prices.

The Dow Jones industrial average (Charts), the broader S&P 500 (Charts) index and the tech-heavy Nasdaq composite (Charts) all gained at least 0.5 percent roughly 90 minutes into the session.

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Stocks rallied Tuesday and Wednesday, after the Federal Reserve cut a key short-term interest rate, reassuring investors worried that the mortgage and credit market malaise would send the economy into recession.

But the advance hit a roadblock Thursday on weak bank sector earnings, a plunging dollar, record oil prices and a Congressional hearing about the subprime mortgage mess.

After the one-day pullback, investors seemed willing to restart the advance, thanks in part to some strong earnings.

Oracle (Charts, Fortune 500) reported higher quarterly earnings and revenue that topped estimates late Thursday. The business software leader also reported a large jump in sales of new software licenses, that topped forecasts.

Also late Thursday, Nike (Charts, Fortune 500) reported higher quarterly earnings and revenue that beat expectations, thanks to a tax benefit and a boost from the weak U.S. dollar.

Market breadth was positive. On the New York Stock Exchange, winners topped losers three to two on volume of 880 million shares. On the Nasdaq, advancers beat decliners by eight to five as 920 million shares changed hands.

Volume is expected to be heavy throughout the session because of the quarterly options expiration, a day when stock index futures and options, and individual stock futures and options are all expiring simultaneously. This event can sometimes increase market volatility.

A variety of central bank officials were speaking Friday, including Federal Reserve Vice Chairman Donald Kohn and Fed governors Frederic Mishkin and Kevin Warsh, all of whom are voting members of the 2007 FOMC.

Speaking at a conference in Germany, Fed governor Mishkin said that economic downturns have always been connected to instability in financial markets, and that policy makers should keep that in mind. He also discussed inflation targeting.

Fed Vice Chairman Kohn, also speaking at the conference, indicated he is now less opposed to inflation targeting - having specific set goals for price gains - than he has been in the past.

Kohn also spoke to recent questions about whether this week's Fed rate cut went too far and essentially bailed out investors who made bad decisions, saying that the focus of the central bank is always the macro economy.

Fed Governor Kevin Warsh is expected to speak on financial market developments at 1 p.m. EDT.

Treasury prices rose, bouncing back after several down days. The gain lowered the yield on the 10-year note to 4.65 percent from 4.70 percent late Thursday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell to a new record low against the euro before recovering some ground, and slipped against the yen. On Thursday, it stood at equal value with the Canadian dollar for the first time in more than 30 years.

U.S. light crude oil for November delivery rose 22 cents to $82. The October contract settled the previous day at $83.32, ending at a record high for the fourth session in a row.

However, the record price remains below inflation-adjusted highs hit in the early 1980s, which would be equal to at least $95 a barrel today.

COMEX gold for December delivery rallied $3.90 to $743.80 an ounce.