NEW YORK, New York - U.S. stocks raced ahead on Friday, with technology shares leading the way on signs inflation may be peaking.

"The growth engine of the U.S. economy is still alive and kicking, and that's important," Joe Quinlan, Head of CIO Market Strategy for Merrill and Bank of America Private Bank told Reuters Friday.

"Growth estimates for the second quarter are still good. There is a better tone in the market than we have seen in recent weeks, in terms of inflation possibly peaking here. Maybe we can avoid stagflation."

The Nasdaq Composite climbed 390.48 points or 3.38 percent to close Friday at 12,131.13.

The Standard and Poor's 500 accelerated 100.40 points or 2.47 percent to 4,158.24.

The Dow Jones industrials advanced 575.77 points or 1.76 percent to 33,212.96.

On foreign exchange markets, the U.S. dollar remained friendless although steady, except against the commodity currencies which forged higher.

The euro settled back at 1.0732 around the New York close Friday, after hitting higher levels earlier in the day. The British pound consolidated around 1.2630. The Japanese yen was a tad higher at 0.9515, as was the Swiss franc at 0.9576.

The Canadian dollar gained to 1.2722. The Australian dollar jumped to 0.7157. The New Zealand dollar firmed to 0.6536.

On overseas equity markets, the German Dax accelerated 1.62 percent. The Paris-based CAC 40 climbed 1.64 percent. London's FTSE 100 added 0.27 percent.

The Hang Seng in Hong Kong did best of the equity markets, gaining 581.16 points or 2.89 percent to close Friday at 20,697.37.

In Japan, the Nikkei 225 advanced 176.84 points or 0.66 percent to 26,781.68.

China's Shanghai Composite added 7.13 points or 0.23 percent to 3,130.24.

The Australian All Ordinaries gained 73.80 points or 1.01 percent to 7,413.10.

South Korea's Kospi Composite rose 25.60 points or 0.98 percent to 2,638.05.

In New Zealand, the S&P/NZX 50 went against the trend, declining 37.69 points or 0.34 percent to 11,065.15.