Market Wrap for Friday, January 25: Dow and S&P Climb Towards Old Highs

The U.S. stock market continued to climb amid low volatility conditions on Friday. Investors remain focused on quarterly earnings reports with a wide number of stocks making large moves.

The overall atmosphere remains bullish with the S&P 500 already rising nearly 5.4 percent in 2013. Both the Dow and S&P 500 are closing in on their old highs from 2007.

Major Averages

The Dow Jones Industrial Average rose almost 71 points, to 0.51 percent, to close at 13,896.

The S&P 500 climbed a little better than 8 points, or 0.54 percent, to 1,503.

The Nasdaq Composite led the major averages with a gain of more than 19 points, or 0.62 percent, to just below 3,150.

New Home Sales

The lone domestic economic report on Friday was New Home Sales. The headline number for December was below expectations, coming in at 369,000 units versus consensus of 385,000.

An upward revision in November, however, boosted two-month average home sales above consensus so today's report was not as bad as it looked at first glance. Nevertheless, inventories are up to a 4.9 month supply versus a 4.5 month supply in November. This is the highest level since April 2012.

Commodities

Crude oil was slightly higher on Friday to finish the week. NYMEX crude futures, the U.S. benchmark, rose 0.07 percent to $96.02. Brent futures were last trading up 0.11 percent to $113.41. At last check, natural gas had added 0.15 percent and was trading at $3.45.

Precious metals fell for the second day in a row. COMEX gold futures were down 0.75 percent to $1,657.40 late in the day while silver futures had lost 1.71 percent to $31.18. Copper was last down 0.58 percent.

In the agricultural complex, corn and wheat were mixed with corn falling around 0.50 percent and wheat trading up a little better than one percent. In softs, cotton fell almost three percent while coffee traded up more than one percent on the day.

Bonds

Late in the day, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) was trading down roughly 1.35 percent to $118.05 as money flowed out of bonds.

Yields rose sharply across the curve on a bad day for Treasury investors. The 2-Year yield jumped three basis points to 0.27 percent while the 5-year added eight basis points to 0.85 percent.

The yield on the 10-Year Note and 30-Year Bond surged 10 and nine basis points to 1.95 percent and 3.13 percent, respectively.

Currencies

Late in the session, the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.23 percent to $21.78.

The closely watched EUR/USD pair was last up 0.65 percent to $1.3464. The greenback continued to rise against the Yen, however, with the USD/JPY pair jumping another 0.70 percent. The U.S. dollar was also stronger versus both the Canadian and Australian dollars.

Volatility and Volume

The VIX continued its small uptrend on Friday with a gain despite a broadly higher market. The VIX closed the session up 1.65 percent to 12.90.

Volume remains light with only around 101 million SPDR S&P 500 (NYSE:SPY) shares trading hands compared to a 3-month daily average of 138 million.

Stock Movers

Netflix (NASDAQ:NFLX) added to a 42 percent gain on Thursday after its quarterly earnings results with a nearly 16 percent gain on Friday.

A number of brokerages released positive notes on Priceline.com (NASDAQ:PCLN) this morning sending the stock up almost 6 percent on the session.

Molycorp (NYSE:MCP) climbed more than 13 percent after the company priced a secondary offering.

Select Comfort (NASDAQ:SCSS) fell almost 18 percent after releasing its quarterly earnings results.

Cirrus Logic (NASDAQ:CRUS) surged 10 percent on the day after its earnings results.

OshKosh (NYSE:OSK) jumped almost 19 percent after releasing quarterly results.

QLogic (NASDAQ:QLGC) added more than nine percent after its third-quarter earnings.