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NEW YORK (CNNMoney.com) -
Falling oil prices and rallying technology shares boosted the broader market Friday, at the end of an otherwise dismal week for stocks.
The Nasdaq composite (up 10.27 to 2,256.73, Charts) gained close to 0.5 percent. The Dow Jones industrial average (up 23.46 to 10,778.58, Charts) and the S&P 500 (up 3.53 to 1,259.37, Charts) index both saw smaller gains.
Treasury prices slumped, lifting the corresponding yields and the dollar was mixed versus other major currencies.
The Nasdaq slipped for the week, after rising for 7 weeks straight. The Dow and S&P have now slipped for two weeks in a row after rising for the previous five.
But Friday's recovery could be an optimistic sign for those worried about the end of the fall rally.
"Today's rise is a good sign," said Ken Tower, chief market strategist at Cyber Trader. "What we're seeing is that the bulls are not dead and the market had bounced off key short-term lows, which is what you would expect from an uptrend."
Tower said that the recovery Friday bodes well for the busy week ahead, which brings reads on retail sales, manufacturing and consumer prices.
However, beyond that he is concerned that the advance is losing steam and there is not enough money on the sidelines eager to go into equities to support continued gains.
Friday's market
Stocks ping-ponged across the unchanged line all morning and through the early afternoon as investors showed some disappointment about Intel's forecast, kept an eye on Merck's latest Vioxx news, and fretted about rising interest rates amid higher Treasury bond yields and gold prices.
However, a rally in chip and Internet stocks in the afternoon boosted the Nasdaq and helped the broader market recover.
After a more than month-long rally, stocks have been volatile and somewhat directionless over the last two weeks. However, declines have been fairly short lived, with the market showing some resilience.
"It's been a choppy period, where it takes a hit one day and then bounces back the next," said Michael Carty, principal at New Millennium Advisors. "We're in a range here, but I think the trend remains upward."
Carty said that the market was again reacting day-to-day to the moves in the energy market, as well as anything pertaining to interest rate policy, particularly ahead of next Tuesday's Fed policy meeting.
U.S. light crude oil for January delivery fell $1.27 to settle at $59.39 a barrel on the New York Mercantile Exchange. Earlier, the price briefly jumped above $61 a barrel in electronic trading.
Intel disappoints, but chips rise
Market breadth was positive. On the New York Stock Exchange, winners beat losers 10 to 7 on volume of 1.4 billion shares. On the Nasdaq, advancers topped decliners three to two on volume of 1.69 billion shares.
News from Intel (up $0.38 to $26.08, Research) late Thursday was met with little enthusiasm from investors Friday. The chipmaker narrowed its current-quarter revenue forecast late Thursday to a range that sets the midpoint below analysts' forecasts. Intel shares sold off for most of the day, before gaining near the close along with other chips.
The Philadelphia Semiconductor (up 8.80 to 497.21, Charts) index, or the SOX, gained 1.8 percent, recovering from early-week declines.
Alltel (up $1.06 to $65.88, Research) shares gained after saying it would spin off its traditional phone service to its shareholders and combine it with Valor Communications Group in a deal worth about $9.1 billion.
Blue-chip gainers included Dow components General Motors (up $0.92 to $22.92, Research), Hewlett-Packard (up $0.69 to $29.92, Research) and Caterpillar (up $0.75 to $58.09, Research).
On the downside, Merck (down $0.55 to $29.13, Research) slipped 1.5 percent, dragging on the Dow. The New England Journal of Medicine said that the embattled drug company left out key information about the risks of its withdrawn pain treatment Vioxx when it presented a study more than five years ago. The company has denied these claims.
Energy stocks slid, retreating after Thursday's big run up. The Amex Oil (down 16.96 to 1,006.99, Charts) index lost 1.7 percent.
Sentiment rises
Adding some support Friday: the preliminary read on December consumer sentiment from the University of Michigan, released shortly after the open. The index rose to 88.7 in the month, from 81.6 last month. Wall Street economists thought it would rise to 85.
A separate report showed that wholesale inventories were leaner than expected in October.
Treasury prices fell, with the yield on the 10-year note rising to 4.52 percent from 4.48 percent late Thursday. Treasury prices and yields move in opposite directions.
The dollar was barely changed versus the euro and gained versus the yen.
COMEX gold for February delivery jumped $7.50 to settle at $530.20 an ounce.
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