Stocks were also helped by the National Association of Home Builders latest reading, which tracks builders' perceptions of the market. The afternoon report showed that the index rose to 17, its highest reading since last September.
Investors will be watching the fate of CIT Friday, as it moves towards possible bankruptcy. "It puts a ripple in the system. We've had relative calm sailing lately. I think it's going to be more like a pebble in the water and the ripples are going to keep going for awhile," said Tim Smalls of Execution LLC.
Traders have said the concern about CIT is more that there will be an economic impact, rather than a direct impact on financial markets. They say the worry is that small and middle-sized businesses who borrowed from CIT could be shut off from funding.
The only data of note Friday is housing starts, reported at 8:30 a.m.
The Dow Thursday was up 95 at 8711, giving it close to a 7 percent gain for the week. The S&P 500 rose 8 to 940 and the Nasdaq was up 22 at 1885.
Sentiment Friday should be helped by more good news from the tech sector, which helped lead the market higher Thursday with a 1.7 percent gain. Both Google and IBM beat Wall Street estimates in after-the-bell reports.
IBM reported earnings per share on a diluted basis of $2.32, compared with $1.97 per share last year. The company raised its forecast for the full year to $9.70 per share and also said it was well ahead of pace for its 2010 road map of $10 to $11 per share. Sales for the quarter fell 13 percent, but IBM profit was helped by cost cutting.
Google reported net per share of $4.66, compared to $3.92 per share last year. Google showed a slight increase in revenue to $5.52 billion, compared with $5.37 billion a year ago.
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"As long as we don't get a big miss, everything's hunky dory," said Smalls. "If you get through Intel , Goldman , JP Morgan , Citibank and GE without a problem, that's not bad. Then we have the next wave next week."
Traders say the market is more worried about Citigroup and Bank of America because they are considered the weaker of the major banks. There is also concern about GE's results because of what it might say about its financial arm. (GE owns NBC, the parent of CNBC.)
Goldman, JP Morgan and Intel all topped Wall Street estimates in reports this week.
While traders remain very skeptical of the market's four day rally, there are some talking about a possible positive turn for the market, even if temporary.
See what Harris Private Bank's Jack Ablin is watching and why he might put a lot of money to work soon.
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