Gold tracked the euro lower, falling below $1,190 an ounce.

On Wall Street, US stocks scored solid gains in early Friday afternoon trading, following Dow component General Electric's announcement of a dividend increase and the European banks' stress tests. Initially, the three US stock indexes were mixed — Dow up a touch while the S&P 500 and the Nasdaq were down slightly - right after the stress test results were released. The stress test results came on the heels of solid earnings from major US companies, including Microsoft and Ford.

In Europe, the market closed higher before the results of the tests were released. Mining shares ranked among the gainers as copper hit a two-month high. The STOXX Europe 600 Banking Index inched higher.

World stocks measured by the MSCI All-Country World Index advanced 0.29 percent, while the FTSEurofirst 300 index of top European shares advanced 0.48 percent to end at 1,044.31.

The three major US stock indexes had fluctuated between positive and negative territory most of the morning.

At 1733 GMT, the Dow Jones Industrial Average shot up 84.61 points, or 0.82 percent, to 10,406.91 - just about 22 points below its 2009 close.

The Standard & Poor's 500 Index was up 7.11 points, or 0.65 percent, to 1,100.78 - within about 15 points of being at the break-even point for the year. The Nasdaq Composite Index rose 16.17 points, or 0.72 percent, to 2,262.96 - just about 7 points below where it ended 2009.

On Friday, General Electric Co. moved to raise its dividend by 20 percent in a sign that the largest US conglomerate has put the worst of the financial crisis behind it. Shares of GE, a Dow component, jumped 3 percent to $15.66.

The euro was down 0.52 percent against the dollar, at $1.2821, after rising briefly after data showed German business sentiment jumped in July to its highest level in three years.

The anxiety over the stress tests boosted the dollar's safe-haven appeal, driving it up 0.40 percent against the Japanese yen to 87.26.

The dollar also gained against a basket of major trading-partner currencies, with the U.S. Dollar Index up 0.19 percent at 82.755.

The 10-year US Treasury note declined 3/32 in price, with the yield at 2.953 percent. Traders said the uncertainty over the stress tests was curbing a broader sell-off in the Treasury market.

US August gold futures fell $6.50 to $1,189.20 an ounce following the stress test results.

Oil prices dipped Friday as worries eased about potential damage to Gulf Coast oil operations from Tropical Storm Bonnie.

Benchmark crude fell 60 cents to $78.70 a barrel in midday trading on the New York Mercantile Exchange. Oil has picked up about $2 a barrel since Monday.

The storm, expected to hit the Gulf of Mexico this weekend, has prompted some companies to evacuate crews from rigs. Dozens of ships that were working on a permanent fix for BP's damaged oil well already have been ordered to shore.

"It still appears zeroed in up through the production alleys heading toward Louisiana but updates suggest that it's not going to be a real powerful deal capable of doing significant damage," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.

Oil traders, like investors and market analysts, also were waiting for results of a European investigation into the financial health of Europe's banking sector in the wake of the region's debt crisis.