Stocks posted small gains for the week, despite all the major indexes either closing at or touching 52-week highs at some point, as investors weighed continued economic strength against European sovereign debt worries.
The Dow Jones Industrial Average fell 7.34 points, or 0.06 percent, to close at 11,491.91, a day after reaching a 52-week high. For the week, the blue-chip index rose 81.59 points, or 0.7 percent.
Trading in Dow has been exceptionally quiet lately. For the past 11 sessions, the Dow traded in a high-low range of less than 100 points, the longest such streak since January 2006.
The S&P 500 rose 1.04 points, or 0.08 percent, to close at 1,243.91, also a day after reaching a 52-week high. For the week, the S&P rose 3.51 points or 0.3 percent.
The tech-heavy Nasdaq rose 5.66 points, or 0.2 percent to close at 2,642.97. The index touched a 52-week high in intraday trading Friday. For the week, the Nasdaq rose 5.43 points, or 0.2 percent.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell more than 7 percent, to just above 16.
Among the key S&P sectors, materials, consumer staples and health care were the best performers for the week, while financials were the worst.
AK Steel was the best performer among materials, rising 11.7 percent for the week, while Huntington Bancshares was the worst among banks, falling 8.9 percent.
The euro began to fall sharply mid-morning on continued worries over Irish sovereign debt in the wake of Moody's five-notch downgrade. Meanwhile, European Union leaders agreed to implement a permanent financial safety net from 2013. The news pressured European shares, as banks fell.
The dollar rose against a basket of currenciesas the euro fell, sending gold to under $1,379 an ounce.
Quarterly "quadruple witching," when stock index futures, stock index options, stock equity options and single stock futures expire, added to market volume, but not volatility, said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research.
Volume on the consolidated New York Stock Exchange was 5.4 billion shares, while 2 billion shares changed hands on the NYSE floor.
For the most part, good earnings and economic news was negated by renewed worries in Europe, leading the market to trade sideways, Detrick said.
The low level of the VIX could mark a turning point. The April closing low—of about 15.6—could provide a support, meaning volatility will move higher and stocks lower. Or, as Detrick believes, the VIX will eventually move lower than the April levels, sending stocks higher, although that may happen in the new year.
Given next week will be shortened because of the Christmas holiday, active investors are likely to trade in smaller volumes than usual, Elliot Spar, market strategist at Stifel Nicolaus, said in a note to client. "Who needs to upset a profitable year with wrong way trades," Spar said. He cautioned that stock index futures can "rule the day, hour or minute," when trading volume is light.
AT&T fell despite announcing a 2.4 percent dividend increase, and a 300 million share buyback authorization. AT&T boosted its quarterly dividend to 43 cents a share from 42 cents a share.
Pharmaceutical stocks weakened broadly, led by AstraZeneca after news that approval of the biopharmaceutical's company's blood thinner drug, Brilinta, was delayed again. In addition, brokerage Natixis cut its rating on the company to "reduce" from "neutral."
The news affected shares of some of the biggest drug stocks, including Pfizer , Merck and GlaxoSmithKline .
Financials were mixed after news the Securities and Exchange Commission sent new subpoenas to major banks, including Bank of America, Citigroup, JPMorgan, Goldman Sachs and Wells Fargo. According to Reuters, the SEC is asking about the banks about the beginning stages of mortgage securitization. Bank of America did not provide a comment to CNBC.
In addition, Sandler O'Neill reduced their fourth quarter 2010 EPS for Goldman Sachs and Morgan Stanley to $3.80 and 20 cents from $5.37 and 57 cents, respectively.
BMO Financial Group of Canada said it would acquire Marshall & Ilsley for about $4.1 billion in a stock-for-stock transaction, sending the Wisconsin bank's shares soaring more than 15 percent. Each share of M&I would be exchanged for 0.1257 of a share of BMO.
MasterCard and Visa fell, a day after both of the credit-card transaction companies dropped more than 10 percenton news the Federal Reserve is considering a proposal to cap "swipe fees." Goldman Sachs removed Visa from its "conviction buy" list, while Wedbush cut its price target for MasterCard to $238 from $270, and for Visa to $72 from $87.
GM rose despite news the automaker was recalling about 111,000 vehicles because of a malfunctioning seatbelt buckle.
Technology stocks got a boost from strong earnings reported by Oracle, Research and Motion and Take-Two Interactive Software on Thursday.
Oracle rose more than 5 percent after the tech giant reported profits exceeded expectations as new software sales soared. In addition, at least eight brokerages raised their ratings and price targets for the software giant.
Research In Motion also climbed after the BlackBerry maker reported surprisingly strong sales and profit. Several brokerages also raised their price target on the firm.
And Take-Two Interactive soared after the videogame publisher reported surprisingly strong results, thanks to sales of "NBA 2K11," a sports game.
Also in tech news, Yahoo fell after news the search engine firm plans to shut down underperforming websites, according to the Wall Street Journal. Susquehanna raised its price target for the firm to $20 from $19, and Williams Capital Research raised its rating to "perform."
In other news, Accenture soared above a 52-week high after reporting a 20 percent earnings gain on rising revenue. The consulting firm also raised its current-year and current-quarter forecasts. Several brokerages also raised their ratings and price targets for the stock.
Notable earnings next week include Adobe Systems , Nike and Bed Bath & Beyond .
On the economic front, leading indicators for November rose 1.1 percent, the biggest rise since March and the fifth straight month of gains, according to the Conference Board. The reading was in line with expectations.
On the Calendar Next Week:
MONDAY: Earnings from Jefferies and Adobe Systems.
TUESDAY: FCC votes on net neutrality; earnings from ConAgra and Nike.
WEDNESDAY: MBA mortgage applications, GDP, existing home sales, oil inventories; before-the-ell earnings from Walgreen; after-the-bell earnings from Bed, Bath & Beyond.
THURSDAY: NYSE early close; durable goods orders, personal income and spending, weekly jobless claims, consumer sentiment, new home sales.
FRIDAY: Markets closed for Christmas.
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