Stocks wrapped up another record week as potential merger deals pushed the major markets higher.
"The market responded very well this week to the raft of mergers and acquisitions announcements and private equity deals," said Quincy Krosby, chief investment strategist at The Hartford. "Earnings were also solid and the economic picture was mixed but data was more positive than negative."
The Dow Jones Industrial Average closed at a record high for the fourth time straight session as Hewlett-Packard and Honeywell International each closed at historic highs.
The S&P 500 closed just below a new high, trading less than 1.5% short of the all-time close of 1,527 set in March 2000.
The Dow ended the week up 1.1%, outpacing gains of 0.8% and 0.6% for the Nasdaq and the S&P 500, respectively.
The major markets rose for the fourth straight week, rebounding from declines on Monday to close up four days in a row. The Nasdaq was the best performing index in the last four sessions with a 1.9% gain, compared with gains of 1.5% for both the Dow and S&P.
"What's been happening in the market has been astounding," said James Bianco, president of Bianco Research. "You've got almost every stock in the market going up, which is why we've been up 23 out of the last 26 days."
"Eventually it'll be a problem, but right now the market is going up and money is being made," said Bianco. "In time we'll overdo it -- we almost always do -- but I don't think that time is right now. It's still a market that's been going up on merger mania."
Reuters confirmed reports it had been approached by an unnamed suitor looking to acquire the news and financial data provider, sending shares up more than 26%. Thomson was said to be the unidentified bidder, according to Toronto newspaper the Globe and Mail.
It was the week's second major media deal reportedly in the works, following Rupert Murdoch and News Corp.'s $5 billion offer for Dow Jones.
Yahoo surged 18% at Friday's opening bell, rising sharply on merger speculation. The company was said to be in early-stage talks with potential bidder Microsoft , the New York Post reported. But gains eroded late in the session after the Wall Street Journal reported that a joint venture was the more likely scenario.
Eastman Kodak reported a narrower loss in the first quarter but investors were disappointed with the results, sending shares down 4.8%. The photographic film maker posted its ninth loss in the last 10 quarters as it undergoes a massive overhaul.
KBR , the former subsidiary of Halliburton , said earnings rose 7.7% in the first quarter, lifted in part by business in Iraq. The military contractor and engineering company said first-quarter earnings were $28 million, up from $26 million a year ago.
The Labor Department said Friday morning non-farm payrolls rose in April by 88,000, the lowest monthly figure since November 2004. Although the data came in lower than the 110,000 economists' consensus forecast, investors felt that the employment numbers indicated a solid albeit slowing economy.
Treasury prices rose, pushing yields lower.
Energy prices continued a recent slump as New York light sweet crude futures declined 2.0% to $61.93, ending with a weekly loss of 6.8%, as supply disruption concerns abated. Crude is hanging on to a year-to-date gain of just 1.4%.
Europea Finishes Higher Following Rally in Asia
European shares closed higher, following more M&A news and rallies in Asia.
The London FTSE-100, Paris CAC-40 and Frankfurt DAX were all higher.
Shares in EMI also made strong gains after the group received another bid approach, this time from U.S. private equity firm One Equity Partners. The deal values the world's third largest music company at more than $6 billion, the Financial Times reported.
Meanwhile, Germany's HeidelbergCement is considering making an offer for Britain's building materials company Hanson.
And in earnings news, German reinsurer Munich Re beat analysts' expectations with its first-quarter net profit and said it would buy back over $6.81 billion of its shares before the end of 2010.
Pernod-Ricard shares rose after the world's second-largest wines and spirits group said sales in the last nine months rose 7.2%, above analysts' expectations. The company said top-line numbers were boosted by Chinese New Year demand for Martell cognac and Chivas whisky.
South Korea's Kospi Index finished at a record high, surpassing last week's peak, as new additions to the MSCI indexes such as Doosan Heavy rallied, although broader gains were tempered by some disappointing earnings results.
Singapore's Straits Times Index hit an all-time-high, lifted by banking shares such as DBS Group and United Overseas Bank.
Australia's S&P/ASX 200 Index also broke records, as strong metal prices lifted the world's top miners and as investors took heart from a lower inflation forecast for 2007 from the central bank. Blue chip stocks BHP Billiton and Rio Tinto both gained.