NEW YORK (CNN/Money) -
U.S. stock markets gained Friday, supported by Intel's strong forecast, a continued drop in oil prices and a stellar May payrolls report.
The Nasdaq composite (up 18.36 to 1978.62, Charts) gained close to 1 percent, the Dow Jones industrial average (up 46.91 to 10242.82, Charts) gained 0.45 percent and the Standard & Poor's 500 (up 5.86 to 1122.50, Charts) index gained around 0.5 percent. All three closed off their highs of the session, hit in early afternoon.
Gains on the session were broad based, with 24 out of 30 Dow issues closing higher. Treasurys tumbled, with investors more interested in equities than fixed income. The dollar tumbled, too.
Markets were closed Monday for the Memorial Day holiday. For the four-day week, the Dow gained 0.5 percent, the S&P 500 gained just over 0.1 percent, both closing higher for the second week in a row. For the week, the Nasdaq lost 0.4 percent.
Next week brings little in the way of earnings or economic news, and plenty in the way of Fed speakers, which means issues of inflation and the economic recovery will continue to control stock action.
On Tuesday, Fed chairman Alan Greenspan speaks at the International Monetary Conference and on Thursday at his Senate nomination hearing. Other highlights of next week include the May producer price index, due Friday, and the first read on June consumer sentiment from the University of Michigan, also due Friday.
"I think that next week, and in fact for the next few weeks, the markets are likely to remain in a trading range, with many of the same issues still in place," said Michael Sheldon, chief market strategist at Spencer Clarke.
He says that for the market to put in a significant trading bottom, there needs to be a pronounced decline in energy prices, and the country needs to get through the summer without a terrorist attack in the United States. On a technical basis, the market needs to break through what has been 'higher highs' and 'lower lows.'
Stocks have had a tough week, with the major indexes being jerked back and forth as investors reacted to stubbornly high oil prices and showed caution ahead of Friday's jobs report.
But the jobs report impressed, and combined with Intel, offered up a strong Friday for stocks.
Employers added a robust 248,000 jobs to their payrolls in May, the government said, versus an upwardly revised 346,000 in April. Economists surveyed by Briefing.com were expecting a gain of 225,000. The unemployment rate held steady at 5.6 percent.
The March numbers were also upwardly revised. All in all, 947,000 jobs were created between March and the end of May, confirming that the labor market is firmly back on track.
"This shows we're in a full-blown recovery and I think you're going to see even stronger gross domestic product growth in the second half, all of which bodes well for stocks in general," said Gary Wolfer, senior portfolio manager at Univest Wealth Management and Trust.
Worries about how the lagging labor market would hurt the economic recovery and corporate profits had been in the market for some time. When the monthly payrolls tally began showing real momentum in March, worries turned to how the strong economy would force the Federal Reserve to raise interest rates as soon as this summer, earlier than what some investors had hoped for.
But both sides of these concerns seem to have been mitigated for the time being, analysts say.
Intel and other Friday movers
Intel (INTC: up $0.73 to $28.14, Research, Estimates) helped spark a tech rally, following its bullish mid-quarter update after the bell Thursday.
The tech bellwether tightened its sales guidance to a range that is higher than what analysts had been forecasting, increased its gross margins outlook, and also implied that demand for its chips remains strong.
The stock rose 2.6 percent and gave a push to a number of other technology shares.
All of the Dow's technology components, including IBM (IBM: up $0.21 to $87.56, Research, Estimates), Microsoft (MSFT: up $0.06 to $25.95, Research, Estimates) and Hewlett-Packard (HPQ: up $0.14 to $21.26, Research, Estimates) rose, albeit modestly.
"It's good to see Intel lifting their revenue outlook," Wolfer added. "You need technology to fall into place, and in technology, the semiconductors are the engine."
In another bullish sign for technology, Flextronics (FLEX: up $0.53 to $16.95, Research, Estimates), which makes equipment for Ericsson (ERICY: up $1.03 to $28.25, Research, Estimates), HP and others, issued a bullish forecast, saying that business keeps getting better. The company said that fiscal first-quarter results will meet consensus, and that analysts' estimates for the second half may be too low. Shares rose 3.2 percent.
Among other stock movers, casino operator Mandalay Resort Group (MBG: up $5.65 to $60.27, Research, Estimates) rallied 10.3 percent after reporting a quarterly profit late Thursday that nearly doubled from a year earlier and soundly topped analysts' forecasts.
On the downside, online education company SkillSoft (SKIL: down $2.63 to $8.00, Research, Estimates) tumbled 24.75 percent in unusually active Nasdaq trade. Late Thursday, the company cut its forecast for sales and earnings in the second, third and fourth quarter, saying that bookings are skewed toward the second half of the year. The company also reported quarterly earnings that grew from a year earlier and surpassed expectations.
Market breadth was positive. On the New York Stock Exchange, where 1.11 billion shares traded, advancing stocks outnumbered decliners by close to two to one. On the Nasdaq, gainers beat losers by two to one as close to 1.42 billion shares changed hands.
Contributing to the positive news was a second straight day of declining oil prices. Worries about the rising cost of crude had pressured the major indexes for the last few weeks. NYMEX light sweet crude oil futures lost 79 cents to settle at $38.49 a barrel. Among other commodities, COMEX gold added $2.80 to settle at $391.70 an ounce.
Treasury prices fell, pushing the 10-year note yield up to 4.77 percent from 4.71 percent late Thursday. Bond prices and yields move in opposite directions. The dollar was lower versus the yen and euro.