Stocks closed higher Friday, rebounding from their biggest drop in nearly a month, as worries over Cyprus diminished and following a batch of upbeat earnings reports.
Still, major averages still finished in the red for the week, with the Dow snapping a four-week win streak and the S&P 500 logging its second losing week this year.
(Read More: Where's the Long Awaited Market Correction?)
The Dow Jones Industrial Average rallied 90.54 points, or 0.63 percent, to close at 14,512.03, lifted by by Wal-Mart and Hewlett-Packard. The blue-chip index is still on track for its biggest ever quarterly point gain.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, slid below 14.
But for the week, the Dow slipped 0.01 percent, the S&P 500 dipped 0.24 percent, and the Nasdaq erased 0.13 percent. Cisco was the worst performer on the blue-chip index for the week, while Hewlett-Packard climbed.
Materials led the key S&P sector laggards for the week, while consumer staples was the best performing sector.
(Read More: Cramer Concerned, Says Buyers Pause)
Cyprus was close to a deal to raise billions of euros and unlock a bailout from the European Union that could avert a financial meltdown and its exit from the euro, its ruling party said.
"If the eleventh-hour solution doesn't manifest itself, then it will really get the market's attention because a precedent will be set and it will have implications for other struggling European countries," said Quincy Krosby, market strategist at Prudential Financial.
(Read More: Who Will Blink First? Europe or Cyprus)
The European Union issued the nation with an ultimatum to raise the 5.8 billion euros ($7.4 billion) necessary for a 10 billion euro bailout package by next Monday. The European Central Bank has said it will cut off liquidity to Cypriot banks without a deal. Cyprus' finance minister returned to Cyprus after two days of talks with Russian officials in Moscow failed to deliver a deal to rescue the country.
Earlier, Cyprus agreed with Greece on a takeover of the Greek units of Cypriot banks, which ended uncertainty over the fate of those operations.
European shares trimmed their earlier losses to end flat.
(Read More: As World Watches Cyprus, Slovenia in Danger Zone)
Meanwhile, some strategists pointed to the Federal Reserve's ongoing easy monetary policy as the reason for higher stock prices.
"With the $85 billion a month that the Fed is pumping into the market, this market only has one way to go and that's up," said Alan Valdes, director of floor operations and VP of trading at DME Securities. "And that's going to trump whatever's going on in Europe."
(Read More: Keep the Presses Rolling: Fed Won't Stop Easing)
Apple climbed amid reports the tech giant will unveil the iPhone 5s and the iPad 5 on June 29, according to tech website Gizmorati, citing an inside source and confirmation from a third party. The date would mark the sixth anniversary of the introduction of the original iPhone.
Among earnings, Nike soared to lead the S&P 500 gainers after the sports apparel retailer reported quarterly earnings that easily topped estimates and said future demand for its clothing and shoes gained. At least six brokerages lifted their price target on the company.
Tiffany rallied after upscale jeweler said it sees worldwide sales gaining 6 to 8 percent this fiscal year and posted a better-than-expected profit.
Micron Technology posted a quarterly net loss, but surged nearly 10 percent after the chipmaker said the outlook for memory chip prices is improving.
Meanwhile, Tibco plunged after the business software maker forecast current-quarter results below estimates, citing execution challenges in North America and the UK.
And Darden Restaurants posted quarterly results that largely matched Wall Street's recently lowered estimates as consumers shied away from restaurants amid the payroll tax hike and higher gasoline prices.
JPMorgan held gains after the financial giant's board endorsed Jamie Dimon to remain both chairman and CEO.
Blackstone Group and General Electric's lending arm have discussed jointly pursuing Dell's financial-services business, the Wall Street Journal reported, citing people familiar with the matter. The New York Times also said Blackstone was weighing whether to make an offer for all or part of Dell, adding some people close to the private equity firm are skeptical that any offer will materialize.
Pepsi gained after the U.K. Telegraph reported that investor Nelson Peltz has taken a stake in the beverage maker andMondelez International and may push for a merger. Separately, Pepsi is redesigning its 20-ounce bottle for the first time in nearly 17 years.
(Happy Friday! Watch: Bacon Tacos = Bacos)
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
On Tap Next Week:
MONDAY: Chicago Fed nat'l activity index, Dallas Fed mfg suvey, Fed's Dudley speaks, Bernanke speaks, USDA food prices outlook; Earnings from Dollar General, Apollo Group
TUESDAY: Durable goods orders, S&P/Case Shiller home price index, new home sales, consumer confidence, Richmond Fed mfg index, 2-yr note auction; Earnings from Mattress Firm
WEDNESDAY: Mortgage applications, pending home sales, oil inventories, Fed's Evans speaks, Fed's Rosengren speaks, Fed's Pianalto speaks, Fed's Kocherlakota speaks, 5-yr note auction, farm prices; Earnings from Red Hat, Paychex
THURSDAY: GDP, jobless claims, corporate profits, Chicago PMI, natural gas inventories, 7-yr note auction, Fed balance sheet/money supply, Ebay analysts mtg, weekly rail numbers; Earnings from Accenture, Blackberry, Mosaic, Gamestop
FRIDAY: Good Friday -- US banks open/equity markets closed, personal income & outlays, consumer sentiment
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