Stocks posted the best first quarter in more than a decade, although the last day of the quarter was fairly lackluster, with stocks dropping just before the close in another low-volume session.
The Dow Jones Industrial Average fell 30.88 points, or 0.25 percent, to close at 12,319.73, the worst level of the session. For the quarter, the blue-chip index rose 742.22 points, or 6.4 percent, the best first quarter point gain since 1998 when it gained 891.56 points, and the best first quarter percent gain since 1994, when it rose 6.6 percent.
Among Dow components, American Express and Intel slumped, while 3M and United Technologies gained.
The S&P 500 fell 2.43 points, or 0.18 percent, to close at 1,325.83. For the quarter, the broad market index gained 68.19 points, or 5.4 percent, the best percent and point gain in the first quarter since 1998.
The Nasdaq gained 4.28 points, or 0.15 percent, to close at 2,781.07. For the quarter, the tech-heavy index gained 128.20 points, or 4.8 percent.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded at about 17.70, largely unchanged.
Among key S&P 500 sectors, materials and industrials rose, while financials and consumer discretionary fell.
Late in the session, the VIX started to fluctuate, indicating some concern on the part of investors ahead of the March unemployment report. "We know [the jobs report] is coming out and we may not know what direction it’s going to go," Randy Frederick, head of trading and derivatives at Charles Schwab said.
At current levels—below 18—Frederick is concerned the VIX isn't registering the amount of uncertainty that should be in the market as a result of the unfolding events in Libya, the Middle East, and Europe.
"I think 18 is a realistic bottom threshold," he said. "We have a lot of things going on."
While the market has had a strong year so far, stocks are unlikely to post double-digit gains because of the geopolitical risks, as well as the threat of looming inflation in the U.S., said Frank Fantozzi, CEO of Planned Financial Services, an LPL Independent Wealth Manager in Cleveland, Ohio.
"That's what’s preventing the market from having a gangbuster year," Fantozzi said.
Volatility is likely to continue because many current concerns aren't resolved, and that will keep stocks rangebound, but Fantozzi expects by year-end, the market will have moved up by "high single digits."
"One of the primary reasons is the financial balance sheets of these companies are the strongest they’ve been in 30 years. They are all very healthy, very strong," he said.
Also, he said, the employment picture is getting better, citing falling jobless claims, and the robust private sector employment report by ADP on Wednesday. The government will release March nonfarm payroll data on Friday. Economists surveyed by Reuters expect the economy added less than 200,000 jobs in March.
Investors remain focused unrest in the Middle Eastand Japan’s nuclear crisis, but appear to remain confident in the global economic recovery as stocks keep rising. The market is poised to post the best quarterly result since 1998.
The situation also remained tense in Bahrain, but the military there has made it clear it will not tolerate any more public demonstrations. Meanwhile in Syria, President Bashar al-Assad refused to meet protesters’ demands.
"We’ve got a market that seems to resist everythingfrom earthquakes to nuclear meltdowns, and it seems to be money looking to come in,” Art Cashin, director of floor operations at UBS Financial Services, said on CNBC.
Oil prices surged with U.S. light sweet crude climbing above $106 a barrel. For the quarter, oil rose more than 16 percent to $106.72.
Meanwhile London Brent crude ended above $117, rising nearly 24 percent for the quarter.
Energy stocks rose broadly across producers, servicers, coal and natural companies, as oil gained. Hess , Consol Energy and Occidental Petroleum were among companies leading the sector higher.
Energy is the top performing group in the first quarter and within the sector, Chevron and ExxonMobil are the Dow's top two gainers, climbing 19 percent and 16 percent, respectively.
The market also focused on news that potential Warren Buffett successor David Sokol unexpectedly resigned from Berkshire Hathaway. In a press release, Berkshire said Sokol bought shares of Lubrizol before recommending the company to Buffett. Sokol told CNBC Thursday morningthat in retrospect, he wouldn't have told Buffett about Lubrizol, but he still would have bought shares in the specialty chemical company.
Both Berkshire's class A and B shares declined.
Fertilizer producer CF Industries, agriculture giant Monsanto and farm equipment maker AGCO shares advanced after a report from the Department of Agriculture's annual prospective plantings data showed increases in the number of acres planted with corn, wheat and cotton.
On the tech front, Microsoft traded flat after news the tech giant filed a formal complaint against Google with antitrust regulators in the European Union, saying Google is preventing competition in the business of Internet search. Microsoft has been the target of antitrust cases in the U.S. and Europe. One of Microsoft's subsidiaries had filed a complaint earlier.
And Intel fell after FBR Capital Markets cut its earnings estimates for the first quarter for the company to 48 cents a share from 51 cents, and reduced its price target to $25 a share from $27. The brokerage is concerned about declining sales for notebooks and PCs, as tablets gain popularity.
Retail stocks slumped after Wal-Mart CEO Bill Simon told USA Today that inflation could affect prices later this year. JCPenney, Lowe's, Office Depot and Macy's all declined.
Tesla jumped after reports that Morgan Stanley has upgraded the automaker's price target to $70 a share, in part because of rising demand for electric cars.
But CarMax plunged almost after the used car dealer posted same-store sales fell short of expectations.
Among firms which recently priced their IPOs, Qihoo tumbled more than 6 percent after skyrocketing almost 86 percent on its first day of trading. Apollo Global traded flat after finishing lower on its first day.
Also expected this week is an IPO from health and wellness products retailer GNC. The firm is poised to start trading on the NYSE Fridayunder the ticker symbol "GNC."
Meanwhile, Ally Financial plans to raise up to $100 million in an IPO offeringthat will allow the government to sell down its majority stake in the bailed-out auto and mortgage lender. And private equity-backed Dunkin' Brands is considering an IPO of about $500 millionin the second half of 2011, according to sources, Reuters reported.
Volume remained light for yet another session, with inly 542 million shares changing hands on the NYSE floor.
In economic news, U.S. factory ordersfell 0.1 percent in February, dragged down by transportation, the Commerce Department reported. Orders had risen 3.3 percent in January.
Initial claims for unemployment fell to a seasonally-adjusted 388,000 for the week ended March 26, from a revised 394,000 the week before, the Labor Department reported. Claims last week were reported at 382,000.
Also, the Chicago Purchasing Managers Index showed the pace of business activity in the Midwest slipped in March.
European stocksclosed lower, with banks among the weakest performers amid rekindled fears over the eurozone's debt crisis. After Ireland's stock market had closed, the Irish Central Bank announced that four of the country’s biggest banks would need up to 24 billion euros of additional capital, including 13.3 billion euros for Allied Irish Banks and 5.2 billion euros for Bank of Ireland. (Read more: Ireland Bank Shares Halted).
Asian markets finished mostly higheron the last day of the quarter.
FRIDAY: Auto sales, nonfarm payroll report, ISM manufacturing index, construction spending; Plosser speaks.
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