Stocks pared losses in the last few minutes of the session to end higher, capping a stellar week for the markets marked by Republican gains in Congress, the Fed's decision to pump more money into the economy, and a surprisingly strong jobs report.
The Dow Jones Industrial Average rose 9.24 points, or 0.08 percent, to close at 11,444.08, a high for the year. The blue-chip index advanced nearly 3 percent for the week.
JPMorgan and Bank of Americawere the top performers on the Dow for the week, while Kraft and Merck were the leading laggards.
The S&P 500 Index rose 4.79 points. or 0.4 percent, to close at 1,225.85., also a record high for the year. For the week, the broad-market index rose 3.6 percent.
Harman International Industries and the New York Times were the best performers on the S&P 500, while Quanta Services and Discovery Communications were the worst.
The Nasdaq rose 1.64 points, or 0.96 percent, to close at 2,578.98, another record high for 2010. For the week, the Nasdaq was up nearly 3 percent.
Foster Wheeler and SanDisk were the best performers on the Nasdaq, while Vertex Pharmaceuticals and Expedia were the worst.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell nearly 14 percent this week to just above 18.
The 10 key S&P 500 sectors advanced for the week, led by financials, energy and materials stocks.
The jobs number gave a boost to the dollar, as investors viewed the news as a surprising sign of real strength in the economy.
But the dollar's rise wasn't good news for stocks for much of the session, which have been moving inversely to the U.S. currency. When the value of the dollar is low, interest rates are low, and dollar-denominated assets are cheaper to foreign buyers, a scenario that has pleased the markets.
Traders also were assessing how to judge the Fed's plans to pump more money in the economy now that jobs are coming back.
In a surprise, gold continued to rise, settling at new high for the yearof $1,397.30. Some market participants see the dollar's move higher as temporary, and remain uncertain as to the economy's true strength. And among other metals, silver hit a 30-year high to catch up with gold prices, while palladium rose to a fresh nine-year high.
Meanwhile, oil prices rose 6.7 percent for the week.
Financials outperformed other sectors amid speculation that the Fed will soon allow some healthy banks to increase dividend payments, people familiar with the decision said late Thursday.
Shares of Bank of America , Wells Fargo , Citigroup and JPMorgan all rose. The Keefe Bruyette Woods Bank Index advanced more than 2 percent.
News that global shipments of personal computers continued to rise in the third quarter failed to lift many computer makers on Friday. The market research firm iSuppli said shipments rose from the second quarter as well as from a year ago to 88.1 million units.
Nonetheless, Apple , HP and Dell were all lower, although IBM gained late in the session.
Several customers of Boeing will see delays of up to 10 months in orders for 787 aircraft, Aviation Week reported Friday. Boeing shares dropped on the news in after-market trading.
Meanwhile, shares of Research in Motion fell after news Dell plans to switch its 25,000 BlackBerry users to Dell's smartphone, the Venue Pro.
Shares of Massey Energy soared after news the coal producer received a takeover offerfrom Alpha Natural Resources, according to the Wall Street Journal.
More companies continued to reportearnings with mixed results. AIG shares reported losing more than $2 billion because of charges and losses from asset sales. AIG also reported it expects to close its recapitalization plan to reduce the government's stake in the company to just about 92 percent.
Toyotaraised its full-year outlookfor the second time after Japan's subsidies to stimulate demand helped almost double quarterly earnings.
Coventry Health advanced after the health insurer posted earnings that were much better than anticipated, as medical costs fell. The firm also raised its outlook, and said profits would rise 67 percent this year.
Meanwhile, shares of pharmaceutical companies were lower after news that even a Republican sweep of the House is unlikely to reverse health care legislation.
Pfizer and Novo Nordisk declined.
Beazer Homes rose even after the homebuilder reported a surprising drop in third quarter earnings as the sluggish economy continued to drag down homes sales.
Kraft slumped a day after the Dow component reported a weak revenuefor the quarter.
Starbucks, meanwhile, raised its full-year forecastand reported a 86 percent jump in profit for the quarter. At least five brokerages raised their price target for the coffee-chain retailer and S&P Equity Research raised its rating on the stock to "hold" from "sell."
Shares of Fluor soared to the top of the S&P after the engineering and construction firm reported a jump in revenue and despite a loss due to cost increases related to a U.K. wind farm project and a legal battle over a joint venture. Stifel Nicolaus and Credit Suisse raised their price targets for the stock.
Activision slumped despite reporting earnings which more than tripled, as sales rose and margins improved. And Wedbush removed the video game maker from its "best ideas list."
Meanwhile, DISH Network rose slightly after reporting earnings and revenue that were better than expected. The pay-TV provider, however, said it lost customers for a second straight quarter.
Royal Bank of Scotland reported earnings, saying it sees a challenging fourth quarter ahead, while HSBC said profits so far this year were "well ahead" of 2009 levels, but traders said the update from the bank had not impressed the market. European bank stocks were lower.
Warren Buffett's firm Berkshire Hathaway is slated to post earnings tonight after-the-bell.
The jobs news was the latest in a big week for the U.S. economy with Republicans winning control of the House of Representativesin Tuesday's elections and the Federal Reserve announcing it would buy $600 billion in additional bonds on Wednesday.
Payrolls rose by 151,000in October, up from a decline of 41,000 the month before, thanks to a surge of 159,000 in private sector employment, according to the Labor Department. Government payrolls slipped by 8,000 and the unemployment rate remained steady at 9.6 percent. Economists had expected a 60,000 rise in nonfarm payrolls, and a 75,000 gain in private employment.
The market's biggest concern now is the sluggish housing market and jobs, said Michael Gault, VP of the Investment Advisory Team at WeiserMazars, a wealth management firm.
While the October payroll report was good, it wasn't "ground shaking," Gault added.
"We need to see month-over-month consistent improvement (in jobs)," he added. "This is the best nonfarm payroll number we’ve gotten since April. We need to see more consistency in improvement in that regard."
Todd Schoenberger, managing director, LandColt Trading, was more upbeat about Friday's number.
"Now that we have the influential quantitative easingpackage in place, the country should expect a continued thaw of the frozen labor iceberg throughout the rest of the year and deep into 2011," Schoenberger said. "The 'wealth effect' is clearly improving and should signal positives for consumer discretionary budgets, especially leading into the holiday shopping season."
In the day's economic news, pending sales of previously owned U.S. homes fell unexpectedly in September, according to the National Association of Realtors. The Pending Home Sales Index, based on contracts signed in September, fell 1.8 percent to 80.9 from an upwardly revised 82.4 in August. Economists polled by Reuters had expected a 3 percent rise.
On Tap Next Week:
MONDAY: Employment trends index, St. Louis Fed pres Bullard speaks, Dallas Fed pres Fisher speaks, Fed governor Warsh speaks, 3-yr note auction.
TUESDAY: NFIB small biz optimism index, Wholesale trade, 10-yr note auction, SCOTUS hears AT&T class action case.
WEDNESDAY: Weekly mortgage apps, Jobless claims, International trade, Import & export prices, Oil inventories, CFTC hearing on Dodd-Frank, 30-yr bond auction, Earnings from GM, Macy’s and Cisco.
THURDSAY: Veterans Day – Bond market closed, stocks and futures markets open, G20 mtg. begins, Earnings from Kohl’s, Disney and Nvidia.
FRIDAY: APEC CEO summit, Consumer sentiment, Earnings from DR Horton and JCPenney
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