Stocks close mixed at the end of a strong week

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NEW YORK (CNNMoney) -- Stocks ended mixed Friday but the major gauges all posted gains of more than 2% for the week on rising hopes for the U.S. economy.

This week's advance was driven by a string of upbeat economic reports, signs of strength in the banking sector and rising hopes for a lasting solution to the debt crisis in Europe.

"We're seeing widespread sense of optimism about global economy," said Karl Schamotta, senior market strategist at Western Union Business Solutions.

At the same time, investors say stocks are being underpinned by the Federal Reserve, which has announced plans to keep interest rates low and maintain its current stimulus programs.

Bonds, meanwhile, were under pressure as investors gravitated towards more risky assets. The yield on the 10-year U.S. Treasury note rose to 2.3%, up from about 2% at the beginning of the week, as prices fell.

"We're seeing a lot of cash come off the sidelines," said Schamotta. "That's supportive of the equity market and the risk trade in general."

On Friday, the Dow Jones industrial average (INDU) fell 20 points, or 0.1%, to close at 13,233. The S&P 500 (SPX) edged up 1 point, or less than 0.1%, to 1,405. The Nasdaq (COMP) eased 1 point, or less than 0.1%, to 3,055.

For the week, the Dow and the S&P 500 both advanced 2.4%. The Nasdaq rose 2.2% over the last five trading days.

The S&P 500 and Nasdaq have posted weekly gains for five weeks in a row.

Friday's mixed trading came as investors digested reports on inflation, industrial production and consumer sentiment.

"Some of the economic news today was a bit disappointing, but none of it points to a change in direction," said said Peter Cardillo, market strategist at Rockwell Global Capital.

Meanwhile, options-related activity was adding to some of the choppiness.

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Friday marks "quadruple witching," when four types of contracts expire -- those tied to market index futures, market index options, stock options and stock futures. While many traders try to settle out those contracts ahead of expiration, there is often some volatility on the actual day.

Stocks finished higher Thursday, as investors welcomed a batch of better-than-expected economic news.

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Economy: Inflation for February increased by 0.4% in February after rising 0.2% the previous month, according to the government's latest numbers.

Higher gasoline prices were the biggest factor in the rise, accounting for more than 80% of the increase. The report showed consumer prices were up 2.9% year-over-year.

Industrial production was unchanged in February, according to data from the Federal Reserve. The report was expected to have shown an increase of 0.5%.

The University of Michigan Consumer Sentiment Index for March fell to 74.3 from 75.3 in February, according to a preliminary report. Economists had expected the index to have risen to 75.8.

Companies: Shares of Apple (AAPL, Fortune 500) ended the day flat after the company released the new iPad Friday. On Thursday, Apple shares touched an all-time high above the $600 per share benchmark.

Sprint (S, Fortune 500) ended its $9 billion agreement with LightSquared, a wholesale provider of 4G service, after it became increasingly clear that LightSquared's network may not get off the ground.

Currencies and commodities: The dollar lost ground against the British pound, but rose versus the Japanese yen and the euro.

Oil for April delivery rose $1.95 to settle at $107.06 a barrel.

Gold futures for April delivery eased $3.71 to end at $1,655.80 an ounce.

World markets: European stocks moved higher. Britain's FTSE 100 (UKX) rose 0.3%, the DAX (DAX) in Germany added 0.2%, while France's CAC 40 (CAC40) edged higher by 0.5%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) rose 1.3% and Japan's Nikkei (N225) ticked up 0.1%, while the Hang Seng (HSI) in Hong Kong shed 0.2%.