Market Wrap: Stocks Inch Up to Cap Strongest Week of Year

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By Sinead Carew

NEW YORK -- U.S. stocks closed slightly higher Friday, ending the S&P 500's best week for 2015 on a quiet note as investors waited for U.S. companies to report third-quarter earnings.

The S&P 500 had a weekly gain of 3.3 percent, its best week since Dec. 2015, as investors regained some optimism after a period of heavy volatility since late August on concerns about global growth and uncertainty about U.S. interest rates.

%VIRTUAL-pullquote-We've had a very good week and a very good start to the fourth quarter.%"We've had a very good week and a very good start to the fourth quarter," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "Next week third quarter earnings season begins in earnest. You had disappointing results from Alcoa yesterday and further reason to take money off the table as you go into next week."

Investors are anxious to gauge how companies are faring amid U.S. dollar strength and concerns about growth in China, the world's second biggest economy.

Trading volume was light with 6.77 billion shares changing hands on U.S. exchanges compared the 7.52 billion average for the previous 20 sessions according to Thomson Reuters (TRI) data.

Financial stocks were among the worst performers Friday as investors read further signs of dovishness in the previous day's release of minutes from the Fed's September meeting. Policymakers held interest rates steady and the minutes showed they sought evidence a global economic slowdown wouldn't knock the U.S. economy off course.

After recent weak performance, financial stocks will be in focus next week as Goldman Sachs (GS), Bank of American (BAC) and other big banks post quarterly results.

The Dow Jones industrial average (^DJI) rose 33.74 points, or 0.2 percent, to 17,084.49, the Standard & Poor's 500 index (^GSPC) gained 1.46 points, or 0.1 percent, to 2,014.89 and the Nasdaq composite (^IXIC) added 19.68 points, or 0.4 percent, to 4,830.47.

'More Optimistic'

"We've had a super run," said Jon Merriman, chief executive officer at Merriman Holdings in San Francisco. "You had sentiment that was extremely bad eight days ago. Sentiment has become more optimistic. That signals that it's time for the market to roll over."

Information technology was the strongest S&P sector with 0.5 percent gain. Its biggest driver was Apple (AAPL) with a 2.4 percent increase, its best day in a month.

Five of the 10 major S&P sectors fell, led by the energy sector, drop of 0.7 percent as oil prices settled roughly unchanged. Financials dropped 0.6 percent.

For the week, the Dow rose 3.7 percent while Nasdaq rose 2.6 percent.

Alcoa (AA), one of the first S&P components to report earnings, fell 6.8 percent to $10.26 and was the S&P's biggest percentage decliner after it reported disappointing results.

Advancing issues outnumbered declining ones on the NYSE by 1,726 to 1,318, for a 1.31-to-1 ratio on the upside. On the Nasdaq, 1,516 issues rose and 1,233 fell for a 1.23-to-1 ratio favoring advancers. The S&P 500 posted 25 new 52-week highs and one new low; the Nasdaq recorded 71 new highs and 29 new lows.

-Abhiram Nandakumar and Tanya Agrawal contributed reporting from Bangalore.

What to watch Monday:
  • U.S. stock markets are open for the Columbus Day holiday.
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