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Dow Ends Higher—Even as Dollar Gains

The Dow ended higher Friday—even as the dollar gained strength. Consumer discretionary was a standout after reports showed retail sales rising and consumers' mood improving.

The Dow Jones Industrial Average rose 65.67, or 0.6 percent, to 10,471.50. The S&P 500 advanced 0.4 percent, while the Nasdaq ended slightly lower.

For the week, the Dow ended up about 100 points. The S&P and Nasdaq ended pretty much flat.

Utilities, telecoms and consumer-discretionary stocks were the week's biggest gainers.

Today's economic news was encouraging: The Reuters/University of Michigan gauge of consumers' mood rose to 73.4from 67.4 at the end of November. Economists had only expected the measure to hit 68.5.

Retail sales rose 1.3 percent last month, more than double the 0.6-percent increase economists had expected. Excluding autos, retail sales jumped 1.2 percent, triple the 0.4 percent advance economists expected.

“It looks like households are not a bashful about using their wallets as we thought,” Joel Naroff of Naroff Economics wrote in a note to clients. But "[g]etting this economy moving faster will require the consumer to actually start thinking that spending money is okay," he said.

Plus, import prices rose 1.7 percent for November and business inventories ticked up 0.2 percent in October.

Adding to the optimism, Moody's said the top credit ratings for the U.S. and Britain are not under threat of a downgrade at the moment, though a worst-case scenario could see a cut by 2013. Moody's classifies the U.S. and the U.K. as "resilient" rather than "resistant."

The dollar hit a two-month high against the euroas the encouraging reports on the consumer reignited worries that the Fed would raise rates sooner than expected. Gold fell below $1,120 an ounceand oil settled below $70 a barrel.

Consumer-discretionary stocks rallied, with Macy's up more than 6 percent and solid gains in RadioShack, Lowe's and Best Buy.

United Technologies was among the biggest gainers on the Dow after the company said late Thursday it expects profits to grow in 2010 after declining this year. The company's projected revenue was above Wall Street's most recent estimates, while the top of its projected earnings per share is also above estimates.

Rounding out the top three were Alcoa and Bank of
America .

Bank of Americarose as Bank of New York Mellon Chief Executive Robert Kelly resurfaced as a possible candidatefor the CEO of Bank of America.

Financials were among the week's worst performers as one by one, banks started announcing plans to repay government loans.

Today, it was Dutch online bank ING Group , which said it will repay about $8.27 billion in aid to the Dutch government, about half of what it received during the financial crisis.

Boeing shares rose more than 1 percent after the aerospace giant said its long-awaited 787 Dreamliner aircraft could have its first test flight on December 15.

Shares of Yahoo also rose after Kaufman Brothers upgraded the company to "buy."

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

But overall, tech stocks took a hit after National Semiconductor beat earnings expectations but said its revenue would be flat sequentially in the third quarter, spurring worries about its ability to regain market share.

The Philadelphia Stock Exchange semiconductor index rose 1 percent.

Apple fell after the iPhone maker said it's filed a counter lawsuit against Nokia , citing patent infringement.

And videogame sales were down 7.6 percent in November, according to market research group NPD. That's despite the success of "Call of Duty: Modern Warfare 2", pressure shares of Electronic Arts and Activision Blizzard .

Send comments to cindy.perman@nbcuni.com.