Stocks Gain for Week; S&P Holds Onto 1,150

Stocks struggled Friday but managed to pull off a gain for the week, with the S&P holding a 17-month high at 1,150.

In today's session, the Dow Jones Industrial Average rose but the S&P 500 and Nasdaq fell as investors digested mixed readings on the consumer: Retail sales rose unexpectedly last month, while consumer sentiment softened.

But all three ended higher for the week: The Dow gained 0.5 percent, while the S&P added 1 percent and the Nasdaq advanced 1.7 percent.

Telecoms, financials and techs were the best performers this week; utilities, consumer staples and health care were the worst.

GE , McDonald's and Boeing were the Dow's top three; Coke , Pfizer and Alcoa were at the bottom of the pack.

Financials were among the week's best performers, up over 2 percent, but ended today's session lower as investors locked in some profits ahead of the weekend.

Citigroup lost over 5 percent today, but still gained about 14 percent for the week, ending just shy of the $4 mark. The stock was the biggest percentage gainer on the S&P this week.

Other bailout plays of the week — AIG , Fannie and Freddie — also ended today's session lower but higher for the week.

Financials are up more than 7 percent year to date, but market pros said this week they think the sector still has further to go.

Financials "have a great operating environmentof wide spreads and cheap deposit balances. And what’s going to be the driver for those is loan demands that are going to show back as soon we get jobs back and an inventory build,” Jim Paulsen, chief investment strategist at Wells Capital Management, said on CNBC this week.

Plus, other strategists noted that valuations for a lot of the big banks are still pretty cheap.

Health-care providers took a hit this week as Congress moved closer to reform legislation.

Pfizer was the biggest drag on the S&P this week, after some disappointing results in studies for two of its drugs.

Retail stocks were strong today, with Macy's up over 3 percent and Nordstrom up over 2 percent, after a surprise jump in retail sales.

The government said retail sales grew 0.3 percent in February despite a drop in auto sales and crippling snowstorms that had been expected to weigh on economic numbers for the month. Excluding auto sales, retail sales jumped 0.8 percent. Economists had expected retail sales to decline.

“This retail-sales number — something that people really had negative expectations for — especially with the weather that affected two different weekend days in February — and still coming out to the point that you really can’t bet against the American consumer right now,” Art Hogan, director of global equities at Jefferies, said on CNBC this morning. "I think the consumer has loosened up the purse strings and that continues to bode well for the balance of this year and that points us in the direction of a sustainable recovery," he said.

Indeed, other market pros said on CNBC today that there's a lot of pent-up demand in retail, especially in women's apparel, that bodes well for the sector.

There is some cause for concern as a measure of consumer sentiment faltered.

Reuters and the University of Michigan reported their consumer-sentiment index dropped to 72.5 in a mid-March reading from 73.6 at the end of February. Economists had expected the gauge to climb to 74.

Business inventories were flatin January after a revised 0.3-percent drop in December. Economists had expected a 0.1-percent increase in the latest reading.

Are retail, financials and tech still good plays? Click on the video at left.

The Fed meets next week. Traders will be watching for any signals about when they plan to start raising interest rates — or at least when they plan to remove that "extended period" language from the statement.

Ahead of that meeting, reports today suggest that President Obama is likely to tap San Francisco Fed President Janet Yellen, a respected policy dove, for the post of vice chairman, essentially the No. 2 spot after Chairman Ben Bernanke. She would succeed Donald Kohn, a longtime Fed veteran, who is planning to retire in June.

On the M&A front, Norwegian fertilizer group Yara International said it won't raise its bid for rival Terra Industries , leaving the door open for CF Industries Holdings to buy Terra.

Asian stocks closed mixed as China is struggling to strike a monetary policy balance, while European shares were higher as production data from the euro zone showed the region may be in for a stronger-than-expected recovery.

Volume was light in the U.S. today, with about 8.3 billion shares changing hands on the three major exchanges, about 1 billion less than last year's daily average. Advancers outpaced decliners, roughly 5 to 4.

On Tap for Next Week:

MONDAY: NY Fed survey; industrial production; Dodd expected to unveil financial-regulation bill
TUESDAY: Bear Stearns anniversary; import/export prices; housing starts; Fed meeting (statement at 2:15pm ET)
WEDNESDAY: St. Patrick's Day; weekly mortgage applications; PPI; weekly crude inventories
THURSDAY: March Madness begins; CPI; weekly jobless claims; Fed's Hoenig, Lacker & Pianalto speak; current account; leading indicators; Philly Fed; earnings from FedEx
FRIDAY: Quadruple witching; S&P index rebalancing

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