NEW YORK – Stocks closed the week on a positive note as several new rounds of economic data fed optimism that the world's largest economy is on track to start growing again early next year.
For 2001, though, with just one trading day left, stocks are due to post their second straight down year for the first time since 1973-1974.
The blue-chip Dow Jones Industrial average gained 5.68 points, or 0.06 percent, to 10,136.99. The Nasdaq composite rose 10.85 points, or 0.55 percent, to 1,987.27, while the benchmark Standard & Poor's 500 index added 3.89 points, or 0.34 percent, to 1,161.02.
For the week, the Dow rose 1 percent, the Nasdaq added 2.1 percent and the S&P 500 gained 1.4 percent. Year to date, the Dow has dropped 6 percent, the Nasdaq is down 19.6 percent and the S&P 500 has given up more than 12 percent.
Volume came to 718.78 million shares, compared with 680.45 million shares at the same point Thursday. Trading volume has been light this week because of the holidays, making stocks more susceptible to fluctuations as there were fewer prospective buyers or sellers.
Early in the day, separate reports showed the hammered-down manufacturing sector may be on the rebound, consumer confidence has improved and first-time jobless claims rose less than expected -- all positive signs for the economy.
"It's just more evidence that we have an economy that's likely to turn up sooner rather than later," said James Luke, portfolio manager for BB&T Asset Management, which oversees $8 billion in Raleigh, North Carolina. "I wouldn't be surprised to see the economy turning by the first quarter, and actually, that's what the market has been telling us."
Initial claims for unemployment benefits rose to 392,000 in the week ended Dec. 22 from a revised 385,000 in the prior week, the Labor Department said. Still, that was less than the 401,000 new claims Wall Street economists had forecast.
With the economy in recession since last March, the weekly jobless claims data receive special scrutiny for any sign that declines in employment might be starting to level off.
Orders for non-defense and non-transportation durable goods rose for the second straight month in November, the Commerce Department said. That may bode well for the beleaguered manufacturing sector, investors said.
Adding to optimism, consumer confidence rose in December for the first time in six months. Consumer confidence is closely watched as consumer spending underpins two-thirds of the nation's economy.
The Conference Board, a New York-based private research group, said its index of consumer confidence surged to 93.7 in December from a revised November reading of 84.9.
"We've probably bottomed in this market and this economy, and 2002 should be pretty good," said Benjamin Pace, managing director at Deutsche Bank Private Banking.
In company news, Yahoo! Inc., which earlier this week reported strong holiday shopping growth at its online vendors, rose 53 cents, or nearly 3 percent, to $18.30. Merrill Lynch raised its fourth-quarter estimate on the Web browsing service, saying its ad revenue will be up 5 percent from the third quarter. Merrill Lynch cited benefits from the launch of a paid-search deal with Overture Services Inc.. Overture rose $2.095, or 6.06 percent, to $36.66.
Companies that rely on advertising revenue followed the upward trend. Viacom Inc., which owns the CBS, Nickelodeon and UPN television networks, rose $1.26 to $45.05. AOL Time Warner Inc., the world's largest Internet and media company, climbed 67 cents to $33.10. AOL, the world's largest Internet services provider, also said it has more than 33 million subscribers, meeting most forecasts of Wall Street analysts.
Micron Technology Inc. rose 49 cents to $31.66 on news South Korea's Hynix Semiconductor may sell some operations to its U.S. rival. Micron and Hynix rank second and third in the computer memory sector. An alliance could reshape the industry as their combined output capacity exceeds leader Samsung Electronics.
The Philadelphia Stock Exchange semiconductor index tacked on a 1.54 percent gain. The index has surged more than 40 percent since Sept. 21. Semiconductor shares are often the first stocks to recover ahead of an economic rebound.
Financial stocks rose as upbeat economic data fueled hopes for economic growth. Citigroup added 41 cents to $51.19, and J.P Morgan Chase & Co. Inc. rose 23 cents to $36.55.
Waters Corp. climbed 80 cents to $40 after Standard & Poor's said the laboratory equipment maker will replace FMC Corp., a chemical company, in the S&P 500 index. Money managers, whose portfolios mirror the benchmark S&P 500 index, scrambled to add the new stock.
The Russell 2000 index, which tracks smaller company stocks, rose 9.60, or 2.0 percent, for the week after gaining 1.00 to 493.62 on Friday.
Overseas, markets were higher Friday with Japan's Nikkei stock average finishing the day up 0.8 percent. In Europe, France's CAC-40 closed up 0.7 percent, Britain's FT-SE 100 rose 0.6 percent and Germany's DAX index gained 0.8 percent.
Reuters and the Associates Press contributed to this report.