US Stocks rise, but debt ceiling jitters persist (ext)

NEW YORK (CNNMoney) -- U.S. stocks posted solid gains on Friday as corporate profits helped offset the ongoing uncertainty regarding the U.S.'s debt ceiling.

"All the posturing in Washington is adding to investor frustrations the longer things get drawn out without anything getting done on the debt ceiling," said Michael James, senior equity trader at Wedbush Morgan Securities.

The Dow Jones industrial average (INDU) rose 43 points, or 0.3% to close at 12,480.

The S&P 500 (SPX) rose 7 points, or 0.6%, to 1,316 and the Nasdaq Composite (COMP) jumped 27 points, or 1%, to 2,790, largely due to strong earnings from Google.

Google reported profits that easily beat forecasts after the bell Thursday, and noted that Google+ topped 10 million users in two weeks. Shares of Google surged 13%.

But the U.S. debt ceiling debate remains the big topic on investors' minds. The Dow fell 1.4% this week, in part because of the concerns over the debt ceiling, while the S&P fell 2.1% and the Nasdaq fell 2.5%.

House Speaker John Boehner and House Majority Leader Eric Cantor said Friday that Republican lawmakers have been doing everything they can to avoid a default. The rhetoric unnerved investors who are hoping for a more definitive plan of action.

Shortly after, President Obama offered up some soothing words, saying, "We have enough time to do a big deal ... we know how we can create a package that solves the deficit and debt."

The ongoing debt debate comes as Standard & Poors warned that the United States' debt could be downgraded in the next three months.

"Moody's and S&P have jumped into the fray and said 'if we are treating you like a corporation, you're not being responsible leaders and we need to downgrade you,'" said Marc Pado, U.S. market strategist with Cantor Fitzgerald.

Investors are already frazzled by worries over Europe's sovereign debt problems. The results of European bank stress tests were released Friday, with regulators saying that eight out of the 90 banks tested failed the stress tests.

The dollar strengthened against the British pound and Japanese yen, but fell against the euro.

Oil for August delivery rose $1.72 to $97.41 a barrel.

Gold futures for August delivery rose $4.90 to $1,594.20 an ounce.