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Stocks Rally for 4th-Straight Week; Dow, S&P 500 Jump to New Highs

Friday, 17 May 2013 | 4:20 PM ET

Stocks closed out the week with strong gains, with the Dow and S&P 500 hitting fresh highs and all three major averages logging their fourth-straight weekly advance, boosted by a pair of positive economic reports.

The S&P 500 closed at 1,667, spiking nearly 150 percent since the financial crisis when the index hit a low of 666.79 on March 6, 2009.

U.S. Major Index Performance

Last Change Today's % Change 1 Week % Change YTD % Change
Dow 15,354.40 121.18 0.80% 1.56% 17.17%
S&P 500 1667.47 17 1.03% 2.07% 16.92%
NASDAQ 3498.97 33.73 0.97% 1.82% 15.88%
Russell 2000 996.28 10.94 1.11% 2.17% 17.30%
CBOE VIX 12.46 -0.61 -4.67% -1.03% -30.85%

The Dow Jones Industrial Average rallied 121.18 points, or 0.80 percent, to close at 15,354.40, led by Boeing and JPMorgan.

The S&P 500 jumped 17 points, or 1.03 percent, to end at 1,667.47. The Nasdaq advanced 33.73 points, or 0.97 percent, to finish at 3,498.97. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, finished below 13.

For the week, the Dow soared 1.56 percent, the S&P 500 gained 1.98 percent, and the Nasdaq added 1.82 percent. Cisco led the top Dow gainers, while Intel edged lower.

The S&P 500 & Nasdaq have each had gains of at least 1 percent in each of the last four weeks. The last time that happened for the S&P was back in October 2011 and the last time the Nasdaq rose at least 1 percent for four-straight weeks was in February 2012.

All key S&P sectors finished in positive territory for the week, led by financials and industrials.

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"Individual economic data points can be volatile, but the average slope of the trend is positive," said Lawrence Creatura , portfolio manager and Clover Small Value Fund at Federated Investors. "Things are improving at a slow rate, but if it continues, there's a link between the fundamental sand the stock market performance…there's a logical reason why prices have been increasing."

(Read More: Cramer: Market Facing Cruel Summer?)

On the economic front, consumer sentiment gained in May to the highest level since July 2007, according to the Thomson Reuters/University of Michigan index. And leading indicators rose in April, hitting its highest level in nearly five years, according to the Conference Board, suggesting an anticipated growth slowdown would be temporary.

Adding to positive sentiment, JPMorgan boosted its its year-end price target for the S&P 500 to 1,715, sharply above the bank's original expectation of 1,580, which the index crossed above last month. So far in 2013, the index has surged more than 15 percent.

"The timing of an increase in the target is not ideal as equity prices hover near highs," wrote Thomas Lee, JPMorgan's chief market strategist. "On the other hand, we do not believe investors should be paring their holdings."

Can FB Bounce From IPO Slump?
Gene Munster, Piper Jaffray, and Ken Sena, Evercore Partners, discuss the future of Facebook. It's the worst-performing stock on the Nasdaq since its IPO a year ago.

Stocks pulled back in the previous session, with the S&P 500 snapping its four-day win streak, amid mounting concerns the Federal Reserve may begin tapering off its bond-buying program.

(Watch Now: What Happens When Fed 'Tapers' Down)

"The uncertainty caused by the Fed's discussion of an exit could create volatility, but the reality is that when it happens, it will occur simultaneously with economic improvement," said Creatura.

Thursday's comments by the Fed's John Williams and Charles Plosser suggested they were both open to reducing asset purchases in the near-future.

Among earnings, JCPenney slumped after the retailer reported another sharp loss on disappointing sales.

Dell posted earnings that missed Wall Street expectations, but revenue topped forecasts as strength in its enterprise solutions business offset declining PC sales.

So far, 93 percent of S&P 500 companies have reported quarterly results, with 67 percent of firms topping earnings expectations and 24 percent missing forecasts, according to the latest data from Thomson Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 4.8 percent from last year's first quarter.

Meanwhile, sales have come in 1 percent on average.

Data analysis software maker Tableau Software skyrocketed more than 50 percent in their trading debut, valuing the company at $2.82 billion. Interest in data visualization software makers has increased after the successful debut of Splunk in April 2012.

A year since its IPO, social-networking giant Facebook remained the worst performer on the Nasdaq 100. The stock is still down more than 30 percent from its IPO price of $38 a share.

(Read More: Facebook Gets Mobile Act Together Post-IPO: Pros)

Meanwhile, Kansas City Southern will replace Dean Foods in the S&P 500 after the market close next Thursday.

—By CNBC's JeeYeon Park. Follow JeeYeon on Twitter: @JeeYeonParkCNBC

On Tap Next Week:

MONDAY: Chicago Fed nat'l activity index, Fed's Evans speaks; Earnings from Campbell Soup, Urban Outfitters, TiVo
TUESDAY: Fed's Bullard speaks, Fed's Dudley speaks, 2-yr note auction, Apple's Cook on the Hill, JPMorgan shareholder mtg, Xerox shareholder mtg; Earnings from Home Depot, Medtronic, Vodafone, Best Buy, Saks, TJX, NetApp
WEDNESDAY: Mortgage applications, existing home sales, Ben Bernanke speaks, oil inventories, 5-yr note auction, FOMC minutes, Boeing analyst day, Royal Caribbean shareholder mtg, Travelers shareholder mtg; Earnings from Lowe's, Target, Staples, Toll Brothers, Hewlett-Packard, L Brands, PetSmart
THURSDAY: Fed's Bullard speaks, jobless claims, PMI manufacturing index flash, FHFA home price index, natural gas inventories, Kansas City Fed survey, 7-yr note auction, Fed balance sheet/money supply, Goldman Sachs annual mtg, L Brands shareholder mtg, McDonald's shareholder mtg, Time Warner shareholder mtg; Earnings from Dollar Tree, Gamestop, Ralph Lauren, Sears Holdings, Gap, Marvell Tech, Ross Stores, Aeropostale, Pandora
FRIDAY: Durable goods orders; Earnings from Abercrombie & Fitch

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