Stocks rose to a 19-month high Friday, with Merck leading the Dow after the drug giant assuaged concerns about the impact of health-care reform.
The Dow pulled off an eighth straight week of gains. And it was a straight flush this week, with the Dow ending higher in five of five sessions this week, for a total gain of 1.7 percent.
A few weak outlooks and lingering worries about Greece kept a lid on some of those gains but there was enough relief in earnings news and subsiding worries about the charges against Goldman Sachs that the Dow pulled it off.
This eight-week winning streak is the Dow's longest since January 2004. This was also the eighth straight weekly win for theNasdaq. And one-third of the companies in the S&P 500were trading at 52-week highs or greater.
Energy, consumer discretionary and industrials were the week's best-performing sectors as investors continued to bet on the recovery. The health-care, telecom and consumer staples sectors were among the weakest links.
Analysts say there's still a lot of uncertainty around the health care and telecom sectors and that the market is going through a period of rotation. "Investors believe that the valuations have gotten ahead of themselves," said Quincy Krosby, market strategist at Prudential Financial.
Boeing had the most positive impact on the Dow this week, up over 6 percent. Coca-Cola was the worst Dow performer, down nearly 2 percent.
Apple had the most positive impact on the S&P and Nasdaq, up nearly 9.5 percent this week, while Qualcomm was the biggest drag on those indexes, down nearly 11 percent.
Some good news on the economic front today: New-home sales shot up 26.9 percentlast month, the largest year-over-year increase in nearly five years, as buyers jumped in to take advantage of the first-time homebuyers' tax credit. February's bad weather may have also played a role, pushing some sales into March. Sales dropped 4.1 percent in February.
Homebuilders got a big boost from the report, with Lennar, Pulte and Beazer all up more than 5 percent.
This came after an earlier report showed durable-goods orders excluding transportation jumped 2.8 percentin March, the largest rise in more than two years. Durable goods are big-ticket items like appliances, cars and planes. Transportation orders tend to be very volatile — as one company's large order or lackthereof can skew the headline number — so stripping them out offers a better indication of demand.
Oil prices settledabove $85 a barrel as signals of a stronger economic recovery in the U.S. boosted the outlook for energy demand. Gold prices topped$1,150 an ounce as the dollar extended lossesagainst the euro.
Greece officially asked for aid from the IMF and European Union today and is negotiating the terms. The move brought some relief to the market, as the issue has been hanging over the market for months, but some investors worried the size of the package may not be enough.
"I've been amazed that the (European Union) has withstood the pressures it has thus far. I'm afraid that it won't be able to stand much longer," Dennis Gartman, founder of The Gartman Letter, told CNBC.
"Trying to get this passed by all of the members of the monetary union, when you have Portugal, Spain, Italy in the same circumstance, it's going to be very hard for anybody to get it passed," Gartman said.
In today's action, Merck was the biggest gainer on the Dow after the world's second-largest drug maker said costs it will incur due to health-care reform will have a smaller impact on its sales compared to rivals.
The S&P health-care index finished up 1.1 percent today after taking a beating in recent sessions.
American Express was in the Dow's No. 2 spot after credit-card company reported strong results.
On the flip side, Microsoft was the biggest decliner on the Dow, down 1.4 percent, after the software giant posted a better-than-expected 35 percent jump in quarterly profit but the results fell short of investors' lofty expectations.
Travelersalso dragged on the Dow after the firm missed expectations this morning and Verizon was lower, after the telecom giant on Thursday reported its wireless growth slowed in the latest quarter.
Amazon shares plunged almost 5 percent after the companyreported lower-than-expected earnings on Thursday, raising concerns about the online retailer's future margins.
Meanwhile, Apple hit another new high for the year, topping $272.
Honeywell also beat estimates and boosted its full-year earnings targetand Xerox shares rose after the digital printer company beat Wall Street expectations.
Next week is another packed week on the earnings front, with reports due out from Caterpillar, Ford, 3M, Visa, ExxonMobil, P&G and Chevron, among others.
What sectors are hot for next week? Click on the Market Outlook video at left.
The Fed is also expected to hold a two-day meeting, starting on Tuesday. Investors will be particularly sensitive to any shift in the Fed's pledge to keep interest rates low for "an extended period" as they position for the central bank to withdraw massive stimulus with the economy appearing to be on the mend.
It could be a "sometime next year" before the Fed moves towards a "significant tightening," said Doug Roberts, chief investment strategist at Channel Capital Research.
In addition, a few notable economic reports are expected next Friday — GDP and consumer sentiment.
It's a big week for shareholder meetings, with Bank of America, GE, AT&T and Berkshire Hathaway on the calendar.
Plus, executives from Goldman Sachs are scheduled to testify before the Senate on Capitol Hill.
US-traded shares of Ericsson jumped more than 5 percent after the Swedish phone maker missed its earnings target but investors bet on the company's prospects.
In other news, CtW Investment Group asked regulators to probe insider transactions by executives at CVS Caremark . CVS says the group's allegations are without merit.
Volume was decent today, with about 1.21 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, more than 7 to 3.
What to Watch For Next Week:
MONDAY: Earnings from Caterpillar, Texas Instruments
TUESDAY: 3G iPads to ship; Goldman execs. testify before Senate; two-day Fed meeting begins; Earnings from DuPont, Ford, 3M, US Steel, Broadcom
WEDNESDAY: GE and BofA shareholder meetings; Weekly mortgage applications; Weekly crude inventories; Fed announcement (2:15 PM ET); Earnings from Comcast, ConocoPhillips, Corning, Sprint, Visa
THURSDAY: Weekly jobless claims; Earnings from ExxonMobil, P&G, Aetna, Bristol-Myers Squibb, Burger King, Kellogg, Motorola, Time Warner Cable, Viacom
FRIDAY: Berkshire Hathaway annual meeting; AT&T shareholder meetings; GDP; consumer sentiment; Earnings from Chevron
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