NEW YORK (CNN/Money) - U.S. stocks held onto a week of gains Friday amid signs that the economy's worst days have past. But with one trading session left in 2001, Wall Street's stability won't save investors from another money-losing year.
Flat on the day, the Dow Jones industrial average is down 6 percent this year. The Nasdaq composite index, which edged higher for a third session, is off 19.5 percent in 2001, a period of sinking profits and the end of a record-long economic expansion.
Fresh data Friday showed that Americans are buying homes and feeling more confident, heartening investors who have pushed stocks higher since late September.
"The market is usually six to nine months ahead of the economy," Mary Burnes, head of Nasdaq trading at Edward Jones, told CNNfn's Halftime Report. "And we are starting to get some good news."
Consumer confidence took an unexpectedly big leap this month while the housing market saw surprising strength. And elsewhere, the number of Americans filing for first-time jobless benefits rose by less than economists expected.
The data "does suggest that the economy is establishing a bottoming process," Bill Sullivan, money market economist at Morgan Stanley Dean Witter told CNNfn's Street Sweep.
While Sullivan says that lower interest rates and tax cuts are helping, he's not sure about the forcefulness of any rebound.
"This tells us nothing about the strength of a recovery next year," Sullivan said.
Shares of Yahoo! rallied for a third day after Merrill Lynch upped its sales target for the Internet portal. Chinese companies trading in the U.S. gained when President Bush took the final step to normalize trade relations between the two countries.
The Nasdaq composite index rose 10.84 points, or 0.5 percent to 1,987.26, extending its gain to 2.1 percent on the holiday-shortened week. Up 1 percent on the week, the Dow industrials gained 5.68 to 10,136.99. The Standard & Poor's 500 index rose 3.89 to 1,161.02 for a gain of 1.4 percent for the week.
The markets closed early Monday ahead of Christmas.
More stocks rose than fell. On the New York Stock Exchange, winning stocks topped losing ones 10-to-6 as 888 million shares traded. Nasdaq advancers beat decliners 7-to-5 as 1.3 billion shares changed hands.
In other markets, the dollar pulled back from a three-year high against the yen and held steady versus the euro. Treasury securities fell.
Crunching the numbers
The session's biggest surprise came from the Conference Board, which said its index of U.S. consumer confidence surged nearly 10 points to 93.7 in December, a month of rising stock prices and the defeat of Afghanistan's Taliban.
The housing market also strengthened. The National Association of Realtors said existing home sales gained 0.6 percent last month while the Commerce Department reported that new home sales jumped 6.4 percent.
Elsewhere, the number of Americans filing for first-time jobless claims rose by a smaller-than-expected 7,000 to 392,000 last week, the government said, the first gain in a month.
Separately, orders for durable goods fell 4.8 percent in November. The numbers, close to expectations, took back only part of October's 12.5 percent surge, a signal the rate of decline may be slowing.
"We are starting to see a bottom in this economy," Lawrence Goodman, chief economist at Globalecon.com, told CNNfn's Before Hours.
Still, the U.S. unemployment rate in December is expected to rise above November's six-year high when the government reports the figures Friday. Cablevision (CVC: up $1.04 to $47.78, Research, Estimates) , the cable company that owns the New York Knicks and Rangers, said it plans to cut 600 jobs, or 4 percent of its work force.
Not all the day's economic data showed strength. The Chicago Purchasing Managers' survey rose much less than expected, a sign that manufacturing in the Midwest remains weak.
In the latest corporate disappointment, Allegheny Energy (AYE: down $0.69 to $35.70, Research, Estimates) said its profits this year will miss forecasts because mild weather and a weak economy cut into demand.
eFunds (EFDS: down $1.65 to $13.95, Research, Estimates) , an electronic payment services provider, warned profits in the fourth quarter will fall short.
But the session saw many gainers. Merrill Lynch raised its fourth-quarter sales target for Yahoo! (YHOO: up $0.53 to $18.30, Research, Estimates) during a week when the Internet portal reported strong holiday sales and agreed to buy HotJobs.com (HOTJ: unchanged at $10.37, Research, Estimates).
Some of the day's best-performing stocks were Chinese companies, which after President Bush took the final step to normalize U.S.-China trade ties.
Gainers included Chinadotcom (CHINA: up $0.48 to $3.00, Research, Estimates), Qiao Xing Universal Telephone (XING: up $0.70 to $5.30, Research, Estimates) and China Unicom (CHU: up $0.68 to $11.31, Research, Estimates).
The Dow's biggest losers included Procter & Gamble (PG: down $0.64 to $79.51, Research, Estimates), Coca-Cola (KO: down $0.77 to $47.17, Research, Estimates), and IBM (IBM: down $0.60 to $122.90, Research, Estimates).
But gains in General Motors (GM: up $0.95 to $48.92, Research, Estimates) and American Express (AXP: up $1.05 to $36.05, Research, Estimates) offset the losses.
As expected, OPEC Friday cut oil production to boost the sagging price of crude oil. The cartel also made a pact with non-OPEC countries to reduce production. But oil prices fell Friday and may not see big gains until global energy demand picks up. 
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