NEW YORK (CNNMoney.com) - Stocks rose Friday after a soft housing report raised bets that the Fed will end its rate hiking campaign soon. Yet, gains were limited as some investors worried that the soft report spelled slower economic growth.

The Nasdaq composite (up 12.67 to 2,312.82, Charts) gained nearly 0.6 percent.

Special Reportfull coverage America's cheapest gas is in this town Summer drivers to get a break on gas Why gas prices are likely to keep climbing You'll pay a little less for gas this summer Expect relief from record February gas prices Why gas prices are rising

The Dow Jones industrial average (up 9.68 to 11,279.97, Charts) was barely higher, remaining near almost five-year highs hit Wednesday. The broader Standard & Poor's 500 (up 1.28 to 1,302.95, Charts) index also added a few points.

For the week, the Nasdaq added a few points and the Dow ended just above unchanged. The S&P 500 declined modestly.

Next week's Federal Reserve policy meeting will be the key market event for the week.

The central bank, meeting Monday and Tuesday, is expected to boost its key short-term interest rate to 4.75 percent from 4.5 percent, its 15th consecutive rate hike since June 2004.

No economic or earnings news is expected Monday. As such, anticipation about the conclusion of Tuesday's meeting will likely drive trade Monday.

As to how markets might react to the Fed decision and it's closely-watched statement, that will depend on what and how the bankers and new chairman Ben Bernanke communicate.

"A lot of people are wondering if this (rate increase) will be the last one," said John Davidson, president and CEO at PartnerRe Asset Management. "However, if you think that, you're likely to be disappointed.

What's of most importance is the statement and what it says about how Bernanke presents things, Davidson added.

Stocks gyrated Friday after a government report on February new home sales showed sales dropped 10.5 percent from the previous month.

Treasury prices surged in response, lowering the yield on the benchmark 10-year note to 4.66 percent from around 4.73 percent late Thursday. Treasury prices and yields move in opposite directions.

"I think part of what has driven the market today are fluctuations in oil and interest rates and the bond market," Charles Lieberman, chief investment officer at Advisors Capital Management, said.

The soft reading on housing gave hope to those who are looking for the Fed to stop raising rates sooner rather than later, but it also reignited fears that slowing economic growth would hurt corporate earnings.

Investors also took in a robust reading on February durable goods orders, but even that topline number showed some signs of underlying weakness, Davidson said.

Crude prices rose for a second straight session, extending Thursday's $2 jump. U.S. light crude oil for May delivery added 35 cents to settle at $64.26 a barrel on the New York Mercantile Exchange.

The dollar slipped against the euro and the yen.

COMEX gold for April delivery rose $9.70 to settle at $560.50 an ounce.

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of nearly 1.48 billion shares. On the Nasdaq, advancers topped decliners by nearly two to one as 1.93 billion shares exchanged hands.

The Nasdaq was helped out by Google (up $23.91 to $365.80, Research), which rallied 7 percent after it was announced late Thursday that the company will be added to the Standard & Poor's 500 index after the close of trade on March 31.

Google will replace Burlington Resources (up $0.48 to $90.76, Research), which is being bought by ConocoPhillips (up $0.64 to $61.76, Research).

Lucent Technologies (up $0.24 to $3.06, Research) jumped on news that it is in talks with French telecom gear maker Alcatel (up $0.25 to $15.70, Research) to form a combined company with a market cap of nearly $34 billion.

Other networkers advanced as well, with the Amex Networking (up 3.88 to 271.61, Charts) index advancing nearly 1.5 percent.

Cephalon (down $9.51 to $63.80, Research) was among the big losers on the Nasdaq. Shares sank 13 percent a day after a FDA panel recommended against approval of the company's Sparlon drug for treatment of ADHD in children and teens.

Oil stocks gained, with the Philadelphia Oil Service Sector (Charts) index rising 1 percent.

The Dow 30 was mixed. GM (up $0.65 to $22.65, Research) and Alcoa (up $0.31 to $29.83, Research) gained, but Home Depot (down $0.69 to $43.12, Research) and Caterpillar (down $0.76 to $75.50, Research) slipped.

____________

For more on the markets, click here.