The long, hot summer has given rise to a torrid rally on Wall Street, where investors are assessing whether the market is ready to accelerate or running out of steam.
In the coming week, a wave of earnings reports and a message from US Federal Reserve Chairman Alan Greenspan may provide guidance for the market, which got a series of surprises over the past week in better-than-expected economic and profit news.
The major indexes posted a third week of gains, with the Dow Jones Industrial Average rallying 1.8 percent to end at 10,640.83 on Friday.
The Standard and Poor's 500 broad-market index, after seven consecutive winning sessions, ended on Friday at 1,227.92, up 1.3 percent for the week and the best level in four years.
The tech-heavy NASDAQ index pushed into positive territory for the year with a weekly advance of 2.1 percent to 2,156.78.
Wall Street responded to a series of positive surprises on the economy, with stronger-than-expected data on retail sales and industrial production, while inflation remained even better than many optimists had expected: consumer and wholesale inflation was non-existent in June.
All this has brightened the mood among market participants who now see hopes that 2005 will end up as a positive year.
Dick Green at Briefing.com said he had upgraded his stand on the market to "moderately bullish" after being "neutral" for the past six months, saying that moderate economic growth, solid earnings and low interest rates will help fuel gains.
Green sees "a mid-single-digit percentage gain" for the broad market this year as the market emerges from its trading range.
"The catalyst for that emergence will be an accepted belief that the Fed is done raising interest rates, or will soon be," he said.
"We aren't pounding the table for stocks and we aren't raging bulls. It is simply that the consolidation phase the past six months has been accompanied by lower expectations and improved valuations. The market can now respond to steady economic and earnings growth by posting decent gains in the second half of the year," Green said.
Bob Dickey at RBC Dain Rauscher said he sees the current rally running out of steam soon.
"The market continues to make progress, but all is not as well as the indices may appear at first. Volume is below average, and the advance-decline figures are weakening," he said.
He said he sees no clear trend up or down, "just a rally within the well-established range."
Bonds fell on the strong economic news and more interest in stocks. The yield on the 10-year US Treasury bond rose to 4.175 percent from 4.109 percent a week earlier while that on the 30-year bond increased to 4.405 percent from 4.361 percent. Bond yields and prices move in opposite directions.
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