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Dow, S&P Post Best Quarter Since 1998

Stocks closed mixed in a quiet session Friday, but the Dow and S&P logged their best quarterly gain in almost 14 years. The Nasdaq posted its best quarterly performance since 1991.

Stocks traded higher for most of the session, fueled by a handful of better-than-expected economic news and after the euro zone agreed to raise its bailout fund.

The Dow Jones Industrial Average ended higher, logging its sixth-consecutive month of gains in addition to a stellar first quarter.

The S&P 500 also finished higher, but the Nasdaq slipped in the final minutes of trading to log its fourth-consecutive day of losses. Still, the Nasdaq posted its best quarterly performance since 1991.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended above 15.

For the quarter, the Dow jumped 8.14 percent, the S&P 500 surged 12.00 percent, and the Nasdaq soared 18.67 percent. Among the Dow components, BofA skyrocketed nearly 72 percent for the quarter, while H-P slumped more than 7 percent.

Financials were the best S&P sector performers for the quarter, shortly followed by techs. Utilities were in the red.

Despite the stellar runup in the major averages over the last six months, Jim Paulsen, chief investment strategist at Wells Capital Management says the market environment “remains very good.”

“I’d look to change allocations from stocks that have done really well in the first quarter and move a little capital to stocks that have trailed a little bit,” suggested Paulsen. “[Eventually,] I think we’re going to get a correction at some point, but it’s going to be hard to call.”

Still, Paulsen maintains his 1,500 target on the S&P 500 for the year.

European shares ralliedafter the euro zone raised the combined lending ceiling for their two bailout funds to 700 billion eurosfrom 500 billion, according to the region's finance ministers.

Spain said it will try to save more than 27 billion eurosin its budget this year through corporate taxes, halting civil servant wages and ministerial spending cuts, according to government officials.

Next week, investors will focus on the government's monthly non-farm payroll report. This comes as Fed Chairman Ben Bernanke said earlier this week the Central Bank may continue its easy monetary policyif the jobs market continues to show signs of weakness.

In addition, earnings season kicks off in the second week of April with Alcoa scheduled to report on the 10th.

Techs were under pressure. Apple ended below $600 a share even after BMO raised its price target on the iPad maker to $675 from $590. Still, shares of the tech giant surged almost 50 percent this quarter.

Research In Motion finished higher after the struggling BlackBerry maker posted a loss, but said it was launching a review that could include a sale of the company. At least seven analysts slashed their price targets on the firm.

Yahoo closed lower after a report that the Internet company will begin layoffs by the thousands starting from next week, according to AllThingsD, with restructuring announcements expected in the following week.

Chipmakersincluding Micron and Sandisk finished in the red.

Financials were trading higher after a handful of price target upgrades. BofA , Citigroup and JPMorgan gained after Deutsche Bank raised its price target on the firms. Goldman Sachs also climbed after Macquaire raised its price target on the bank to $110 from $100.

MasterCard and Visa edged lower after both credit-card providers warned banks about a security breach related to a third-party vendor that could affect thousands of customers.

Among retailers, Liz Claiborne soared after a report that the parent company of Kate Spade may be in buyout talks with private equity firms, according to the Wall Street Journal.

On the economic front, consumer spending increased to its biggest gain in seven months, according to the Commerce Department. In addition, consumer sentiment rebounded to its highest level in more than a year, according to Thomson Reuters/University of Michigan's latest survey.

Meanwhile, business activity in the midwest slipped slightly in February, according to the Institute for Supply Management-Chicago, but still indicated a slow expansion in the regional economy.

Some Asian marketsdelivered their best quarter in 20 years but the region stayed on the sidelines ahead of the Chinese PMI report over the weekend.

—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC

On Tap Next Week:

MONDAY: ISM mfg index, construction spending, Fed's Bullard speaks, Fed's Pianalto speaks
TUESDAY: Factory orders, FOMC minutes, Fed's Williams speaks, auto sales, DC/Maryland/Wisconsin primaries
WEDNESDAY: Weekly mortgage apps, Challenger job-cut report, ADP employment report, ISM non-mfg index, oil inventories, Fed's Williams speaks, JPMorgan's annual letter to shareholders released; Earnings from Monsanto, Bed Bath & Beyond
THURSDAY: Jobless claims, Fed's Bullard speaks, chain-store sales, Yahoo board members' 1st day; Earnings from CarMax
FRIDAY: Good Friday--markets closed/banks open, non-farm payrolls, consumer credit

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