Stocks ended higher Friday, climbing just before the close to cap off the third straight week of gains in the absence of major economic news or earnings.
The Dow Jones Industrial Average rose 73.11 points, or 0.59 percent, to close at 12,391.25, the highest close since June 5, 2008. For the week, the blue-chip index gained 117.99 points this week, or 0.96 percent.
Among Dow components, Caterpillar performed best for the week, rising 2.25 percent, while American Express was the worst performer, falling 2.5 percent.
The S&P 500 gained 2.58 points, or 0.19 percent, to close at 1,343.01, the highest close since June 17, 2008. For the week, the S&P 500 rose 13.86 points this week, or 1.04 percent.
Exxon Mobil was the best performer on the S&P 500, rising more than 2 percent, while Wells Fargo was the worst, falling more than 3.25 percent.
The Nasdaq gained 2.37 points, or 0.08 percent, close at 2,833.95, the highest close since Oct. 31, 2007. For the week, the tech-heavy index rose 24.51 points this week, or 0.87 percent.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 17.
Among key S&P 500 sectors energy, consumer discretionary, and industrials rose, while materials and technology fell.
Amid tensions in the Middle East, investors sought safety in precious metals. Silver rose nearly 2 percent topass a 31-year peak. Gold rose near to close near $1,388 an ounce.
The dollar fell against a basket of currencies, while the euro rose amid talk of a hike in rates by the European Central Bank.
Trading in U.S. stocks was quiet on Friday, capping a week of very light volume, as stocks have steadily moved higher. Volume on the consolidated tape of the New York Stock Exchange was 3.9 billion shares, while volume on the NYSE floor reached 1.2 billion.
"On a slow drift-up market, volumes tend to be very slow," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade. "I don’t think we’ll see volume until we see a big down day."
Kinahan said he's not sure what would trigger a downturn, given that the market seems to be dodging every obstacle. But a level of 1,350 on the S&P 500—which isn't all that far away—could prove to be a sticking point, Kinahan said.
"That’s a big resistance number," he said. "If we get up there, I would expect to see some sellers come out."
Caterpillar's gain follows news on the agricultural equipment maker's website that machinery sales accelerated in the three months ending in January.
Also in top stock news, rival stock exchanges were continuing to mull whether to launch a competing bidfor the New York Stock Exchange, just days after NYSE Euronext and Deutsche Boerse announced plans to merge, CNBC reported on Friday. The potential bidders include Nasdaq , the Intercontinental Exchange , and the CME .
Investors were continuing to closely monitor political unrest in the Middle Easton Friday as crowds in Libya, Yemen, Iran and Bahrain took to the streets. Also, Egypt approved Iran's request to move two warships through the Suez Canal.
Oil prices gained, with U.S. light sweet crude rising for the week to close at $86.20 a barrel amid the tensions in the Middle East. London Brent crude rose for the week, closing at $102.52 a barrel. (Read more: Crude Prices: Is the Brent-WTI Spread Unwinding?)
In earnings news, Campbell Soup sank to the bottom of the S&P 500 after the maker of soups and snacks cut its full-year forecast, on weak soup sales.
Nordstrom gained after reporting a 35 percent jump in fourth quarter earnings although investors initially focused on the upscale department store's plans for an acquisition. Barclays raised its price target on Nordstrom $48 a share from $42.
Solar stocks gained after SunPowerreported strong earningsThursday after the close, thanks to higher demand for the solar-panel maker's utility and power-plants business. At least five brokerages raised SunPower's price target, and Jefferies raised the company to "buy" from "hold."
Elsewhere, shares rose after the group ousted Jack Griffin, the head of its magazine publishing unit, after less than six months on the job.
And on the tech front, shares of JDS Uniphase fell after Citi cut the communications equipment maker to "hold" from "buy," citing the stock's lofty valuation in the wake of huge moves higher. Miller Tabak, however, raised its price target for the company to $38 a share from $35.
Meanwhile, Intuit's soared despite reporting a drop in second-quarter profit due to the sale of its real estate solutions business. Revenue for the maker of tax software climbed, however.
In M&A news, Citadel Broadcasting entered into exclusive negotiationswith Cumulus Media to be acquired by Cumulus for $37 a share in cash and stock, according to people close to the situation, CNBC reported on Thursday. Citadel emerged from bankruptcy in June 2010.
There were no major economic releases on the calendar Friday. The Flash Crash Advisory Commission met Friday morning and called for an overall of U.S. markets.
Next week, all markets are closed on Monday for the President's Day holiday.
Economic news later in the week will be dominated by housing news, speeches by Federal Reserve presidents, and earnings, largely from retail stores like Wal-Mart , Home Depot , and Kohl's .
In China, the People's Bank of China raised lenders' required reserves by 50 basis points, on Friday, the second such increase this year as it tries to curb inflation.
The move came as PBOC governor Zhou Xiaochuan joined G20 ministers and central bankers to discuss a reform of the currency system—with less reliance on the US dollar—and commodity prices. Host France would like to tackle speculation to limit volatility on the markets.
The G20 has set itself the ambitious goal of agreeing on how to measure imbalances in the global economy, but a final agreement is not expected when the two-day meeting concludes on Saturday. Inflation is unlikely to be on the agenda. In remarks ahead of the summit on Friday, Federal Reserve Chairman Ben Bernanke acknowledged the Fed's bond buying program to stimulate the U.S. economy may be contributing to accelerated growth in emerging markets, but he said rigid exchange rate policies share the blame.
Bernanke will join a panel of central bankers at the gathering on Friday, including European Central Bank President Jean-Claude Trichet, the Bank of England's Mervyn King and the PBOC's Zhou Xiaochuan.
In Europe, shares closed downafter the move by China, and comments by Lorenzo Bini Smaghi, a member of the executive board of European Central Bank, who reportedly said the ECB may raise rates in response to rising prices, according to Bloomberg. The FTSEurofirst300 index fell 0.1 percent.
On Tap Next Week:
MONDAY: President's Day—all markets closed.
TUESDAY: Case-Shiller Home Price Index, consumer confidence, Richmond Fed Survey; Minneapolis Fed President Kocherlakota speaks, 2-year Treasury note auction; Chicago mayoral election; before-the-bell earnings from Home Depot, Wal-Mart, Macy's, NRG Energy, Office Depot, Barnes & Noble.
WEDNESDAY: Mortgage applications, existing home sales, Philadelphia Fed President Plosser speaks, Kansas City Fed President Hoenig speaks, 5-year Treasury note auction; earnings before-the-bell from Lowe's and TJX; earnings after-the-bell from Limited Brands, Priceline.com, and Transocean.
THURSDAY: Durable goods orders, jobless claims, USDA agricultural trade outlook, new home sales, natural gas inventories, oil inventories, 7-year Treasury note auction, money supply; earnings before-the-bell from General Motors, Kohl's, Newmont Mining, Safeway, Sears and Target; earnings after-the-bell from AIG, First Solar, Gap and Salesforce.
FRIDAY: GDP (second reading), consumer sentiment; earnings before-the-bell from JCPenney.
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