NEW YORK (CNN/Money) - U.S. stocks meandered to a mixed close Friday, but managed gains for the week, as investors remained fixed on the activities of coalition forces heading for Baghdad's city center.

The Dow Jones industrial average (up 36.77 to 8277.15, Charts) rose 0.5 percent and the S&P 500 index (up 2.40 to 878.85, Charts) ended the day 0.3 percent better after flip-flopping between positive and negative territory throughout the day. The Nasdaq composite (down 13.07 to 1383.51, Charts), the weakest performer of the three, logged a decline of 0.9 percent.

"Today the market anticipated possible problems over the weekend," said Ned Riley, chief investment strategist at State Street Global Advisors. "If nothing happens, we might have a better Monday than we've been having."

All three indexes ended higher for the week as investors cheered the possibility of a quick end to the war in Iraq, in contrast to the market's performance last week, when the speculation was that the conflict would be prolonged. The Dow gained 1.6 percent for the week, the Nasdaq rose 1 percent, and the S&P 500 claimed a 1.4 percent rise.

With U.S. troops controlling the national airport in Baghdad and some 2,500 Iraqi National Guards surrendering, Wall Street watched the war action with glee Friday and looked the other way when the March employment report showed some 108,000 non-farm jobs vanished in the month -- and that the unemployment rate remained at 5.8 percent.

Next week, investors likely will stay focused on coalition forces' fight for Baghdad. But there also will be some key economic numbers to consider. If the Iraq conflict continues to remain at the forefront, stocks could react little to the data, as was the pattern throughout this week.

Investors await readings on February wholesale inventories, the February trade balance, March producer prices, retail sales, and the University of Michigan's April reading on consumer sentiment in the upcoming week.

Amid the war news and economic reports, Yahoo! (YHOO: Research, Estimates) and General Electric (GE: Research, Estimates) are both on the docket to report first-quarter results. Analysts, on average, expect Yahoo! to report a 4-cent per share earnings gain over the same period last year, and GE to post a profit 3 cents per share lower than the previous year.

After the closing bell Friday, aluminum producer Alcoa (AA: Research, Estimates) said its first-quarter operating profit rose to 23 cents a share from 22 cents a share a year ago, excluding special items.

Ignoring economic weakness at home in the hope that much of it will be resolved when the war in Iraq is over has been the market's modus operandi all of this week. It started Tuesday when the market shrugged off news that the manufacturing sector of the economy is actually in contraction and continued Wednesday when Wall Street barely noticed that factory orders in March shrank by twice what had been expected. On Thursday, news that many more people found themselves filing for unemployment benefits than economists had predicted was largely ignored as well.

The going bet in the market is that the one big thing preventing businesses and consumers from spending is the war in Iraq. But now that the war seems as though it will be over in weeks, not months, Wall Streeters found no reason to sell stocks in the face of the depressing jobs report.

"We had negative unemployment data, but the market's not focusing on that," said Peter Cardillo, director of research at Global Partners Securities. "The market continues to focus on the news from Iraq. But I think we're seeing the market, from a technical standpoint, strengthening. Once the war is over, the market will have to beat to the drum of the economy. But, for now, it's dancing to the tune of war."

In the latest news from Iraq, the country's information minister said Iraqi troops would not use chemical weapons, but might stage suicide attacks using human shields. Iraqi TV also released footage of Saddam Hussein encouraging his people to use any means necessary to fight off coalition forces. Whether the tape was new or old has not yet been confirmed. There is much speculation as to whether Hussein is alive, dead or out of the country. (For full war coverage, go to CNN.com.)

Market breadth was mixed, with nine stocks rising for every seven that fell on the New York Stock Exchange as 1.2 billion shares traded. On the Nasdaq, decliners edged past advancers by a margin of 8 to 7 on volume of 1.3 billion shares.

Few individual issues stood out. The Dow was pressured by Altria Group (MO: down $1.40 to $28.30, Research, Estimates), formerly Philip Morris, after news late Wednesday that the tobacco maker is likely to be sued by 46 states if it misses a $2.5 billion payment for a tobacco settlement agreement due to these states on April 15.

Helping the airline sector move higher, Congress approved more than $3 billion in aid for airlines, which are still feeling the effects of the Sept. 11 attacks and the slowdown in travel due to the war in Iraq. Shares of America West (AWA: up $0.30 to $2.58, Research, Estimates) led the pack, rising nearly 14 percent.

The relatively calm mood in stocks soured the day for U.S. Treasury bonds. The 10-year note lost 11/32 of a point in price, its yield edging up to 3.95 percent. The dollar advanced against major currencies.

World markets ended mostly higher, with most European stocks scoring gains and Asian exchanges rising as well.

Key commodity prices retreated. Light crude oil lost 57 cents to $28.62 a barrel in New York. Gold eased 30 cents to trade at $326 an ounce in New York.