Stocks were juiced ahead of Friday's session as indexes sit at the highest levels since early January.
But beware. Some traders are talking about the idea that as these highs are being reached, sluggish volume could be throwing up warning signs.
The S&P 500 finished Thursday at 1,423.57, just above the key 1,423 level that veteran trader Art Cashin had told us on Wednesday would be a very good number for stocks to reach. But after Thursday's close, he said it's too soon to tell how meaningful it will be.
"The 1,423 is a little too tight to make an all out break out call, but it certainly gives the bulls something going into (options) expirations tomorrow," said Cashin, UBS director of floor operations.
The Dow is just a breath away from 13,000, a big round number and a key psychological level. The Dow finished up 94 points at 12,992, an increase of 2.8 percent since the beginning of the year. The S&P 500 finished at 1,423.57, up 14.91 and its highest close since Jan. 3. The Nasdaq also finished at its best level since Jan. 3, rising 37 to 2,533.
There's not a lot of economic data to latch onto Friday, though there are a few items to watch -- housing starts and building permits are at 8:30 a.m. and consumer sentiment is at 10 a.m. Treasury Secretary Hank Paulson gives an update on housing and credit markets in a speech at 12 p.m. in Washington.
Interesting for Fed watchers will be Atlanta Fed President Dennis Lockhart's appearance on "Squawk Box" as the show broadcasts from Atlanta. Fed Chairman Ben Bernanke warned Thursday that the financial markets are still fragile. He also said he was encouraged by the financial institutions ability to raise capital but he urged banks to continue raising new capital.
Stocks to Watch
After the bell, Nordstrom beat expectations for its first quarter but warned its second quarter would be a bit lighter than expected. It also talked down 2008 expectations, citing a difficult business climate. Nordstrom shares moved higher, but Kohl's stock fell after it lowered its year forecast when it reported earnings after the close.
Home builder stocks got a lift after a late day report Thursday that members of the Senate reached a deal on a housing rescue plan. Developments there could spill into Friday's trading.
Biotechs should be movers Friday as analysts report on the ASCO cancer conference big book, which includes thousands of studies. The book was to be released on line at 9 p.m. Thursday.
Macy's, Schering-Plough and Time Warner hold annual meetings Friday.
I've written about Carl Icahn for a long time, and he doesn't usually misunderstand wheeling and dealing. Yet, as he launched his proxy fight, Yahoo says his characterization of the failed acquisition by Microsoft "reflects a significant misunderstanding of the facts about the Microsoft proposal."
Never one to worry about making friends with his targets, Icahn wrote to the Yahoo management that they "acted irrationally and lost the faith" of shareholders. Icahn has picked up the support of hedge fund Pauslon and Co, which plans to cast its 50 million shares of Yahoo for Icahn's board slate.
Crude oil fell $0.10 to $124.12 per barrel Thursday and the dollar slipped slightly against the euro.
President Bush visits Saudi Arabia Friday, and he is expected to discuss soaring oil prices and the idea of increasing production with his hosts.
Lehman's Edward Morse put out a note late last week, titled "Why Trust Saudi Arabia." Morse said in the thoughtful report that he believes Saudi Arabia will meet its production capacity objectives despite criticism that it is not raising output.
But, he says, it may be in the Saudi's interest to be somewhat ambiguous about its capital spending programs for the time being in order to maximize its bargaining position with the next U.S. president. In other words, "that could mean that Saudi Arabia does less than it otherwise would to slow the current spike in oil prices."