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NEW YORK (CNN/Money) -
Stocks rose Friday and managed gains for the week and month at the end of a surprisingly upbeat quarter for the market.
The Dow Jones industrial average (up 15.92 to 10,568.70, Charts) and the broader Standard & Poor's 500 (up 1.13 to 1,228.81, Charts) both gained a few points. The Nasdaq composite (up 10.47 to 2,151.69, Charts) added 0.5 percent, with the chip sector gaining after Micron Technology's surprisingly strong quarterly earnings report.
Falling oil prices also helped support stocks, particularly after the morning's disappointing economic reports, including a bigger-than-expected decline in personal spending in August.
"It's a cautious day at the end of an up quarter," said Peter Cardillo, chief market analyst at S.W. Bach & Co. "I think we'll continue to see caution next week as we await the start of the third-quarter earnings reporting season, and look at some of the key economic numbers, particularly the unemployment number Friday."
The major gauges closed solidly higher for the week and the quarter. For the month, the Dow and S&P 500 closed higher, while the Nasdaq closed little changed.
Stocks gained in the first half of September, as investors stayed calm amid the aftermath of Hurricane Katrina and the onslaught of Hurricane Rita. However, stocks turned negative mid-month, amid worries about the hurricanes' impact on the economy, and oil prices. Another Federal Reserve interest rate hike added to the stock market's worries.
Yet, after two down weeks, stocks bounced back this week, on a mix of end-of-quarter portfolio reshuffling, and an easing of the anxiety about the hurricane's impact on the economy. The S&P 500 eked out gains for seven sessions in a row, while the Dow gained six out of the last seven sessions. The Nasdaq was more mixed, but managed to gain with the other indexes on Thursday and Friday.
For the quarter, the Nasdaq jumped 4.6 percent, the S&P 500 gained 3.2 percent and the Dow industrials climbed nearly 2.9 percent. (For a look at the quarter's winners and losers, please click here.)
Next week brings a batch of September economic reads and the start of the fourth quarter.
"The fourth quarter is going to be volatile and trying," said Barry Hyman, equity strategist at Ehrenkrantz King Nussbaum. "I don't think the market has fully discounted all the negatives in front of it, including the hurricanes' impact on the economy, higher energy prices on corporate profits, and higher inflation."
On the move
Micron Technology (up $1.11 to $13.30, Research) posted a surprise quarterly profit late Thursday, versus analysts' expectations for a loss. The chipmaker attributed the stronger-than-expected quarter to stronger demand for high margin products such as image sensors and flash memory. Shares jumped 9 percent in very active New York Stock Exchange trade.
National Semiconductor (up $0.67 to $26.20, Research) added 2.6 percent, gaining on news that its board has boosted the chipmaker's quarterly dividend by a penny to 3 cents per share.
A variety of other chipmakers gained too, sending the Philadelphia Semiconductor (up 8.96 to 475.32, Charts) index up nearly 2 percent.
Home builders rose, boosting the Dow Jones Home Construction (up $13.64 to $961.77, Research) index by 1.4 percent.
Procter & Gamble (up $1.32 to $59.46, Research) climbed 2.3 percent after the Federal Trade Commission said it approved the consumer products maker's $57 billion purchase of Gillette (up $1.99 to $58.20, Research), so long as P&G sells off several brands.
Liberty Global (up $1.48 to $27.09, Research) rose 5.8 percent after saying it would buy Cablecom Holdings AG, Switzerland's biggest broadband cable operator, from an investment group for $2.19 billion in cash. Liberty already owns cable operations in more than a dozen European locations.
On the downside, oil stocks fell with the price of the raw commodity. Exxon Mobil (down $1.26 to $63.54, Research) lost nearly 2 percent and was the Dow's biggest loser on a percentage basis. The Amex Oil (down 14.71 to 1,076.31, Charts) index fell 1.4 percent.
Market breadth was positive. On the New York Stock Exchange, winners topped losers by more than three to two on volume of 1.54 billion shares. On the Nasdaq, advancers beat decliners by nearly three to two on volume of 1.65 billion shares.
Sentiment and spending fall
The revised consumer sentiment index from the University of Michigan, released shortly after the start of trading, dropped to 76.9 in September from 89.1 in August, Reuters reported. The decline was unchanged from a preliminary reading earlier in the month.
The decline reflected worries about rising energy prices and the post-hurricane aftermath.
Countering that was a stronger-than-expected Chicago PMI, a Midwest manufacturing indicator. The index rose to 60.5 in September from 49.2 in August. Economists surveyed by Briefing.com thought it would rise to just 51.5. Any read over 50 indicates expansion in the sector.
Personal income fell 0.1 percent in August after climbing 0.3 percent in July; economists surveyed by Briefing.com thought it would rise 0.3 percent. Personal spending declined 0.5 percent in the month after growing 0.1 percent in the previous month. Economists expected a drop of 0.2 percent.
U.S. light crude oil for November delivery retreated 55 cents to settle at $66.24 a barrel on the New York Mercantile Exchange.
Treasury prices slipped, raising the yield on the 10-year note to 4.33 percent from 4.29 percent late Thursday. Treasury prices and yields move in opposite directions.
The dollar gained modestly against the euro and more notably versus the yen.
COMEX gold fell $3.50 to settle at $472.30 an ounce.
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