Stocks finished the day mixed, as Microsoft and Google dragged on techs, but gained 3.6 percent for the week, helped by a rally in bank stocks and a sharp drop in oil prices.
The Dow Jones Industrial Average and S&P 500 index eked out modest gains, managing to avoid spending a third straight weekend in bear territory. The Dow clocked its best week in three months. The tech-heavy Nasdaq wasn't as lucky, ending about five points below the bear mark.
Still, all three indexes snapped multiweek losing streaks. For the S&P and Nasdaq it was six weeks; for the Dow, it was four.
Volume was massive this week, with Tuesday and Thursday registering as the second and third largest NYSE volume days on record, with more than 7 billion shares changing hands eacy day. Average daily volume is 4.38 billion.
Financials waffled throughout the day, but logged a solid week, with Citigroup capping off a string of bank earnings including Wells Fargo and JPMorgan . All three of those stocks gained more than 20 percent this week; Lehman Brothers rocketed more than 30 percent. Also giving the sector a boost was an SEC rule to help curb short-selling on financials.
It was an odd inversion of the market this week: financials led the S&P sector indexes with a 12-percent gain, while energy came in last place with a 5-percent decline.
That was largely due to a sharp drop in oil prices, which snapped three straight weeks of gains. Light, sweet crude finished the week at $128.88 a barrel , down more than $16, or 11%, from last Friday's close of $145.08 a barrel. That day, oil hit an intraday high of $147.27 a barrel.
There has never been a sharper weekly drop in dollar terms; in percentage terms, it was the commodity's biggest decline since December 2004.
Chevron was the biggest drag on the Dow and ExxonMobil was the largest decliner on the S&P 500. Over on the Nasdaq, Google had the most negative impact.
Adding to the oddity of it all, General Motors was the Dow's top gainer, advancing 33 percent.
Some market pros said this is a perfect time to get into the market.
"We have seen the most incredible, overwhelming amount of negative everything – it’s the end of the world," Bill Spiropoulos, CEO of CoreStates Capital Advisors, told CNBC. "This is the time for advisors and client alike to have ice in your veins, clear thought, high testosterone and put money to work now."
With nearly one-fifth of S&P 500 companies reporting, analysts expect second-quarter earnings for the 500 to drop 17.1 percent, Thomson Reuters reports, down from its prior estimate of 16.1 percent.
Next week will bring another onslaught of earnings but traders said the one to watch is Wachovia Bank , which may not be so pleasant, on Tuesday.
And, techies will be looking to Apple to see if the iPod master can get the sector back on a winning track.
There will also be reports from Bank of America and WaMu as far as the banks go, and Yahoo and Amazon in the tech sector. A handful of pharmas report, including Merck, Pfizer, Eli Lilly and Bristol-Myers. Earnings from McDonald's and Pepsi will offer further insight on consumers, and a report from UPS will take the temperature of the economy.
The end of the week will bring more insight on the troubled housing sector, with back-to-back reports on existing-home sales and new-home sales.
In Friday's market action:
Citigroup reported a smaller-than-expected $2.5 billion lossfor the second quarter, prompting at least one analyst to say "the worst may be over in the subprime mess." Its shares rose 7.7 percent.
Google and Microsoft were the biggest drag on major indexes Friday after the companies' outlooks punctured the notion that these pillars of tech were immuneto the economic slump.