Stocks Open Higher; Traders Hope For ECB Action

Bond trading also reflected increased optimism among investors. The yield on the benchmark 10-year Treasury note jumped to 1.53 percent from 1.44 percent late Thursday. That means investors are shedding low-risk assets like U.S. government bonds and putting their money to work in other places, like the stock market.

But a couple days of gains on the stock market hardly means the problems in the economy's underlying fundamentals are solved.

The government reported that the U.S. economy grew just 1.5 percent in the second quarter, a paltry number that isn't enough to bring down the unemployment rate, and nervous consumers pulled back on spending.

Shortly after midday, the Dow Jones industrial average was up 125 points to 13,013. Drug maker Merck jumped more than 3 percent, rising $1.51 to $44.84, the biggest gain in the Dow average, after beating analysts' forecasts for income and revenue.

The Standard & Poor's 500 rose 17 points to 1,377. The Nasdaq composite index was up 42 at 2,935.

Among other stocks making big moves:

— Amazon jumped more than 6 percent, rising $15.13 to $235.14. The online retailer reported a steep drop in earnings but analysts were expecting the decline, which was caused mostly by costs related to buying a warehouse technology company.

— Starbucks reported higher revenue and net income. But investors were disappointed that the company cut its outlook for the current quarter, worried over slowing traffic in June and July. It is also considering closing unprofitable stores in Europe. Starbucks fell 11 percent, losing $5.76 to $46.65.

— Facebook, in its first quarter as a public company, reported a 32 percent jump in revenue. That might be welcome news at many companies, but it was lower than previous quarters. And revenue growth is especially important for a newly public company like Facebook, which didn't turn a profit but did attract investors who were willing to bet on fast-growing revenue. The stock dropped more than 9 percent, losing $2.55 to $24.30. It has not traded above its initial pricing of $38 since May 18, its first day as a public company.