Stocks ended a short trading week higher, closing up for the sixth straight session as the major market indexes reflected a bullish bias ahead of Friday's jobs data and next week's start of quarterly earnings season.
"The market drifted higher all week long. I'll give you a dozen different reasons why it shouldn't but the markets just keep going up," Mike Driscoll, head of listed trading at Bear Stearns, told CNBC.com. "That's a fairly encouraging sign going into quarterly earnings."
"You can't fight a rising market like this," Driscoll added. "Everyone says the market should not be doing this, but it would take a brave soul to step in front of this and go short. Guys who are trying to get cute and short this thing are really getting their heads handed to them."
For the week, the Nasdaq gained 2.2%, the Dow Jones Industrial Average rose 1.7% and the S&P 500 climbed 1.5%. The major markets hit a six-week high and have now almost fully recovered from the late-February stock selloff.
For the year, the Nasdaq is now up 2.3%, while the S&P is up 1.8% and the Dow up 0.8%.
Market Confident Now
"The market is relatively confident right now and investors are getting more comfortable with the subprime issue," said Mike Malone, trading analyst at Cowen and Company. "The housing data got the rally started this week, we had the First Data deal and it was a quiet week in terms of earnings warnings."
Trading volume was relatively light in Thursday's session, however, in part because of Friday's March unemployment report, which will be released when the stock market is closed for Good Friday.
"The lack of liquidity tomorrow is going to probably give you an exaggerated response to the number," said Richard Gilhooly, senior bond strategist at BNP Paribas.
On Thursday, billionaire financier Kirk Kerkorian's investment firm Tracinda offered DaimlerChrysler $4.5 billion for the German automaker's Chrysler division. Tracinda said its offer was contingent upon a new labor agreement with the United Auto Worker's union. DaimlerChrysler shares rose more than 5% while General Motors shares gained 2.8%.
Breadth was positive on the NYSE with advancing shares outpacing decliners by nearly two to one. Eight of the 10 sectors in the S&P 500 traded higher, with gains led by shares in healthcare, consumer discretionary and technology, while basic materials stocks lagged the overall market.
"I expect, day to day, the market is going to be very volatile," David Spika, investment strategist with Westwood Holdings Group, told CNBC.com. "Employment right now is probably at the top of the line and it depends on how the market will interpret tomorrow's data."
Healthcare led sector gainers on Thursday with biotech stocks such as Sepracor, Amgen and ImClone Systems moving higher.
The group was also the best weekly sector performer with a gain of 2.8%. Tech was not far behind with an advance of 2.5%, followed by consumer discretionary stocks, which rose 2.2%. The financial group was the week's notable laggard, gaining just 0.5%.
Biosite, which has agreed to be bought by Beckman Coulter, said that Inverness Medical Innovations has indicated it is ready to make an unsolicited offer for Biosite for $90 a share.
Technology stocks attracted investor attention but early optimism faded for Micron Technology , which saw shares fall after the company reported a wider-than-expected quarterly loss but said memory prices appeared to be stabilizing. Goldman Sachs downgraded the stock to "sell" from "neutral," saying consensus estimates are overly bullish.
Goldman also raised the target price on shares of Yahoo!, sending shares slightly higher.
Microsoft will have to hand over information about its Windows operating system to rivals companies in the European Union for almost zero compensation, under the terms of the European Commission's antitrust ruling, the Financial Times reported Thursday.
Rockwell Automation fell after its chief financial officer, James Gelly, resigned to pursue other opportunities. The resignation prompted JP Morgan to downgrade the stock to "neutral" from "outperform."
Ryland Group rose after the homebuilder issued preliminary first-quarter results which provided some optimism for analysts. Wachovia Securities said the company had a stronger-than-expected quarter operationally as the first-quarter cancellation rate of 28% improved from 49% in the fourth quarter.
New York light crude futures declined but prices hovered just above $64 a barrel as the 15 British soldiers detained by Iran returned to London. Natural gas inventories rose by 58 billion cubic feet last week, the Energy Information Administration said.
Weekly jobless claims for the week ending March 31 rose by 11,000 to 321,000, above economists estimated increase of 7,000.
U.S. markets are closed on Friday in observance of Good Friday. Aluminum maker Alcoa will be the first of the Dow 30 components to announce quarterly earnings when it reports on April 10.
The bond markets will be open on Friday, however. Treasury yields held steady on Thursday ahead of tomorrow's jobs report.
Europe Closes Higher But Asia Ends Mixed
The Bank of England kept interest rates on hold on Thursday, as widely expected. Many economists now expect the central bank to raise rates in May, boosting stocks.
Britain's benchmark FTSE-100 closed higher, Germany's DAX finished up in Frankfurt while the Paris CAC-40 turned slightly positive late in the session.
Tokyo's Nikkei 225 Average finished lower following a two-day rise, with Fast Retailing and other recent gainers dropping and lower oil prices weighing on energy stocks such as Nippon Oil.
South Korea's Kospi Index closed at a second straight record high led by technology counters such as LG.Philips LCD on expectations earnings are set to recover, but ran out of steam to close flat as investors locked in gains in banks and steel firms.