A near-absolute of the rally in stocks over the past few months has been that momentum is king, and that the default setting when trading volume is light is for stocks to go higher.
Friday proved that mantra is alive and well, as the market pushed higher, landing the Dow Jones Industrial Average and S&P 500 at new highs for 2011.
The Dow rose 30 points to 12,092, the S&P 500 gained 4 points to 1311 and the Nasdaq climbed 15 points to 2769.
Light volume or no, Friday’s finish was impressive for the fact that, after a couple of hours of back-and-forth, the market took a nosedive — the S&P 500 getting within 2 points of 1300 — before a steady grind-it-out climb the rest of the day.
The Nasdaq’s outperformance was helped by decent gains by some of the sector’s heavyweights: Cisco (NASDAQ:CSCO), Microsoft (NASDAQ:MSFT), and Intel (NASDAQ:INTC) all finished higher.
Strength also was seen in consumer electronics stocks and telecoms: recently frowned-upon names like Garmin (NASDAQ:GRMN) and TiVo (NASDAQ:TIVO) were gainers, while networking gear maker JDSUniphase (NASDAQ:JDSU) after a strong earnings report late Thursday.
Gambling stocks had a tough day, on the heels of a disappointing earnings performance on Thursday by Las Vegas Sands (NYSE:LVS). Casino equipment makers fell, as did rivals like MGM Resorts (NYSE:MGM).
Bonds continued to be hit by selling, with all durations breaking out of ranges that had been in place for nearly two months. The yield on the 10-year note jumped up to 3.64%, its highest level since May.
Commodities were off just slightly as a whole — oil slipped below $89 a barrel, but sugar prices bounced back 2.1% after a huge selloff on Thursday. Silver was up a bit, gold down a bit.
Overall, Friday’s market seemed to lack the conviction that similarly evolved from the morning’s employment data. As economist David Rosenberg said, there was something for bulls and bears alike: while the addition of 36,000 nonfarm payroll jobs was well below estimates, manufacturing jobs again showed some life, adding 49,000 jobs and increasing for the third month in a row — the first time that has happened since 1998.
The market has now digested nearly 60% of the S&P 500’s earnings reports coming this quarter. But with another 360 or so coming next week, more volatility could be ahead for investors.
