NEW YORK (CNN/Money) -
Stocks posted modest gains Friday, boosted by select blue chips, but closed the week little changed, with investors finding few incentives to buy ahead of some key events in the weeks ahead.
The Dow Jones industrial average (up 38.89 to 10,416.41, Charts) gained almost 0.4 percent, the Standard & Poor's 500 (up 2.97 to 1,135.02, Charts) index gained nearly 0.3 percent, while the Nasdaq composite (up 3.06 to 1,986.73, Charts) edged up 0.1 percent. All three had been higher in late morning and early afternoon trading.
Volume was fairly light, as it has been for several weeks, with the market lazing in typical "summer doldrums" fashion.
Bonds and the dollar declined, while gold surged.
For the week, the Dow closed virtually unchanged, rising 0.06 percent. The S&P 500 index closed virtually unchanged, losing 0.1 percent, while the Nasdaq lost 0.6 percent.
Next week brings no economic news until Thursday, when the May durable goods orders report and the final read on first-quarter gross domestic product growth are due. The first earnings of note appear Tuesday, when Goldman Sachs and Morgan Stanley both issue their reports.
"This is a very difficult market to figure out," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "I think you have a lot of buying under the surface, but professional traders are hedging themselves and that's causing this lack of volatility."
He says that semiconductors, technology and the Nasdaq, generally, are at more vulnerable points technically than other sectors or indexes, and that is something investors should be attuned to. A sector rotation seems to be going on, where portfolio managers and other traders are putting money into defensive, high dividend yielding sectors like energy, industrials, and the transports, in preparation for higher rates.
The June 29-30 Federal Reserve policy meeting, at which the central bank is widely expected to raise short-term interest rates, and the June 30 transfer of power in Iraq, are the next potentially-market moving events for traders.
However, expectations about those events may already be built into the market, particularly insofar as interest rates, traders said.
Fed funds futures contracts indicate full expectations that the central bank will boost rates by about a quarter-percentage point at the meeting.
"I think we're sort of in a holding pattern as we get ready for the second quarter earnings, which start pouring in around mid July," said Mark Bryant, senior vice president at Brean, Murray & Co.
"People have sort of accepted oil prices, have factored in the Fed, so I think earnings will be the next catalyst," he added.
Analysts are currently expecting second-quarter earnings to rise almost 20 percent from the same quarter a year earlier, according to tracking firm Thomson/First Call.
Friday's movers
A number of sectors gained, albeit marginally. Among Dow gainers, Alcoa (AA: up $1.23 to $32.53, Research, Estimates) scored the biggest gain, up 3.9 percent, followed by Microsoft (MSFT: up $0.58 to $28.35, Research, Estimates), up 2 percent.
Among other movers, two tech companies offered mostly upbeat earnings, but investors sold the stocks on expectations of even stronger results.
Red Hat (RHAT: down $2.29 to $20.10, Research, Estimates) tumbled more than 10 percent after the Linux distributor reported higher quarterly earnings late Thursday on revenue that missed analysts' estimates.
Adobe Systems (ADBE: down $1.88 to $42.73, Research, Estimates) edged lower after the maker of graphics software reported profits of 44 cents a share late Thursday, up from 27 cents a year earlier and 2 cents more than expected. But some investors had hoped the company would post even more bullish results. The stock fell more than 4 percent.
Career Education (CECO: down $10.79 to $56.24, Research, Estimates) tumbled more than 16 percent after new, damaging claims were filed against the company late Thursday as part of an ongoing class action lawsuit. The suit, filed late last year, alleges the for-profit manager of higher education schools faked student records and financial statements so as to boost its stock price.
On the upside, shares of Solectron (SLR: up $0.64 to $5.72, Research, Estimates) gained more than 12.5 percent after the maker of electronic gear reported a quarterly profit and issued a current-quarter earnings forecast above analysts' current forecasts.
That gave a boost to a number of techs down the food chain, and provided some reassurance about the health of the industry following rival Jabil Circuit's (JBL: up $0.09 to $24.58, Research, Estimates) warning after the close Wednesday, which sent the tech sector, and the Nasdaq composite, tumbling Thursday.
Market breadth was mixed. On the New York Stock Exchange, advancers beat decliners by nine to seven as 1.49 billion shares changed hands. On the Nasdaq, losers edged winners by a narrow margin as 1.69 billion shares traded.
Friday was a "quadruple witching" day, when stock index futures and options, and individual stock futures and options all expire simultaneously. However, any volatility normally associated with such a day probably happened near the open, traders said.
The morning's lone economic report showed the nation's current account deficit -- the broadest measure of U.S. trade with the rest of the world -- jumped to a record $144.9 billion in the first quarter.
Oil prices hovered near two-week highs. Light crude oil futures added 19 cents to settle at $39 a barrel in New York. Among other commodities, COMEX gold rallied $6.20 to settle at $395.70 an ounce.
Treasury prices edged lower, pushing the 10-year note yield up to 4.71 percent, up from 4.68 percent late Thursday.
The dollar declined versus the yen and euro.
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