Stocks pared losses in the last few minutes of the session to end higher, capping a stellar week for the markets marked by Republican gains in Congress, the Fed's decision to pump more money into the economy, and a surprisingly strong jobs report.
The Dow Jones Industrial Average rose 9.24 points, or 0.08 percent, to close at 11,444.08, a high for the year. The blue-chip index advanced nearly 3 percent for the week.
JPMorgan and Bank of Americawere the top performers on the Dow for the week, while Kraft and Merck were the leading laggards.
The S&P 500 Index rose 4.79 points. or 0.4 percent, to close at 1,225.85., also a record high for the year. For the week, the broad-market index rose 3.6 percent.
Harman International Industries and the New York Times were the best performers on the S&P 500, while Quanta Services and Discovery Communications were the worst.
The Nasdaq rose 1.64 points, or 0.96 percent, to close at 2,578.98, another record high for 2010. For the week, the Nasdaq was up nearly 3 percent.
Foster Wheeler and SanDisk were the best performers on the Nasdaq, while Vertex Pharmaceuticals and Expedia were the worst.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell nearly 14 percent this week to just above 18.
The 10 key S&P 500 sectors advanced for the week, led by financials, energy and materials stocks.
The jobs number gave a boost to the dollar, as investors viewed the news as a surprising sign of real strength in the economy.
But the dollar's rise wasn't good news for stocks for much of the session, which have been moving inversely to the U.S. currency. When the value of the dollar is low, interest rates are low, and dollar-denominated assets are cheaper to foreign buyers, a scenario that has pleased the markets.
Traders also were assessing how to judge the Fed's plans to pump more money in the economy now that jobs are coming back.
In a surprise, gold continued to rise, settling at new high for the yearof $1,397.30. Some market participants see the dollar's move higher as temporary, and remain uncertain as to the economy's true strength. And among other metals, silver hit a 30-year high to catch up with gold prices, while palladium rose to a fresh nine-year high.
Meanwhile, oil prices rose 6.7 percent for the week.
Financials outperformed other sectors amid speculation that the Fed will soon allow some healthy banks to increase dividend payments, people familiar with the decision said late Thursday.