FOX Business: The Power to Prosper
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Optimistic corporate news and encouraging data on the U.S. economy propelled the blue chips 3% higher for the week.
The Dow Jones Industrial Average was up 50 points, or 0.41%, to 12,220, the S&P 500 climbed 4.1 points, or 0.32%, to 1,314 and the Nasdaq Composite gained 6.6 points, or 0.24%, to 2,743. The FOX 50 was up 2.7 points to 924.
"Economic recovery took center stage, and brought with it a rally," said John Prestbo, executive director and editor at Dow Jones Indexes.
Major market averages advanced considerably this week. The Dow jumped 3.1%, the S&P 500 gained 2.7% and the Nasdaq soared 3.8%.
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The report on Gross Domestic Product is a lagging indicator that doesn't take into account the effects of soaring energy prices in the first quarter of 2011.
"While consumer and business spending were both strong in the last quarter of 2010, they have already shown some signs of weakness," wrote Nariman Behravesh, chief economist at IHS Global Insight, in a research note.
"This weakness may persist for a while, due to the 'double shock' of higher gasoline prices and supply-chain interruptions caused by" the disaster in Japan.
Also on the economic front, consumer sentiment dropped to its lowest level in a year, according to a survey by Thomson Reuters and the University of Michigan. Surging food and energy prices led to most of the weakness, according to the report.
Consumers' one-year inflation expectations were steady at an elevated 4.6%. Economists have been keeping a close eye on inflation expectations after the Federal Reserve has embarked on a highly expansionary, but potentially inflationary, monetary policy regime.
If expectations for future prices, and therefore the price of living, dramatically increase there is a possibility that consumers will request higher wages. Oftentimes when inflation finds its way into the wage rate, it becomes difficult to fight.
The Federal Reserve is likely to reign in its highly expansionary asset-buying program, fearing it might heighten long-term inflation expectations, according to statements by several top central bank officials on Friday.
Energy prices have gyrated in recent sessions as traders eye the situation in North Africa and the Middle East.
A combination of NATO and American forces continued slamming Muammar al-Qaddafi's military in Libya. The coalition started bombing Qaddafi's forces over the weekend after the U.N. Security Council gave the go-ahead to protect civilians from violence.
Unrest continued in several oil-producing Middle Eastern countries on Friday. Syrian security forces cracked down on protests, killing at least twenty, according to a report by Al Jazeera, citing witnesses on the ground.
In Yemen, President, Ali Abdullah Saleh, agreed to step down as long as power could be transferred to "clean hands," sources told FOX News. However, thousands still marched in rallies opposing Saleh.
Sporadic protests in Bahrain's "Day of Rage" were quickly quashed by an enormous presence of pro-government forces.
Despite the slew of charged headlines, oil was relatively tame on the day.
Light, sweet crude edged lower by 20 cents, or 0.19%, to $105.40, but jumped 3.5% on the week as traders mulled increased risk of supply disruptions in the Mideast and North Africa.
"Everything took a deep breath here at the end of the week," said Darin Newsom, senior commodities analyst at DTN.
However, Newsom warns that "if we see this sort of [geopolitical tumult] over the weekend it can come back into play next week."
Consumers paid $3.56 for a gallon of regular gas on average nationwide, up from $3.19 last month and $2.81 last year.
In the foreign exchange markets, the euro edged 0.64% lower against the U.S. dollar and the greenback gained 0.34% against a basket of world currencies. Currencies have been particularly volatile in recent sessions as traders consider the impact of sovereign debt fears across the Eurozone, particularly in Portugal, where a bailout seems likely, according to analysts.
Gold traded lower $8.70, or 0.61%, at $1426 a troy ounce.
General Motors (GM) plans on resuming production at its Louisiana pickup truck facility and upstate New York engine factory after halting operations due to part shortages from Japan.
Ford (F) told dealers to halt orders of cars in "tuxedo black" and three shades of red amid shortages of pigment from Japan.
Eastman Kodak (EK) soared more than 8% after the company's Chief Executive Officer said the company could stand to gain $1 billion if it wins a patent claim against Apple (AAPL) and Research in Motion (RIMM).
Global shares drifted between positive and negative territory Friday, but closed modestly in the green.
The English FTSE 100 rose 0.34% to 5,900, the French CAC 40 climbed 0.09% to 3,972 and the German DAX was higher by 0.18% to 6,946.
In Asia, the Japanese Nikkei soared 1% to 9,536 and the Chinese Hang Seng jumped 1.1% to 23,159.