Stocks closed higher Friday after a quiet, preholiday session that turned the Standard Poor’s 500-stock index positive for the year.
Traders were relieved by news that Congress extended emergency unemployment benefits and a payroll tax holiday for workers. Both programs were set to expire at the end of the year. Letting that happen would have reduced economic growth by about 1 percent, analysts said.
The final business day before Christmas also was the slowest full day of trading so far this year. Traders exchanged just 2.22 billion shares, about half of the recent average. The market will be closed on Monday because Christmas falls on Sunday.
Stocks have risen since Tuesday on hopeful signs about the pace of economic growth in the fourth quarter, which ends next week. New claims for unemployment benefits fell last week to the lowest level since April 2008.
A series of mixed economic reports Friday did little to derail that optimism. The S. P. added 11.33 points, or 0.9 percent, to 1,265.33. It started the year at 1,257.64.
The Dow Jones industrial average rose 124.35 points, or 1.02 percent, to 12,294.
The Nasdaq composite index gained 19.19 points, or 0.74 percent, to 2,618.64.
The Dow has risen 527.74 points, or 4.5 percent in the last four days. It was the first four-day winning streak for the Dow since mid-September.
The Treasury’s 10-year note fell 20/32, to 99 26/32. The yield rose to 2.02 percent, from 1.95 percent late Thursday.
Stocks could surge into the new year if the S. P. 500 passes a couple of crucial technical thresholds, said Todd Salamone, research director at Schaeffer’s Investment Research.
Fund managers currently hold relatively few stocks, Mr. Salamone said, and many of their funds have underperformed the market and are negative for the year. If the index rises farther above its break-even point for the year or its average over the last several months, fund managers might flood into the market in a last-ditch attempt to improve their annual returns, he said.
“The worst thing that can happen for a fund manager is to underperform and be in the red when your benchmark, the S. P. index, is in the green” for the year, Mr. Salamone said.
Bank of America was the Dow’s biggest gainer, adding 2.4 percent. All but two of the 30 Dow stocks rose, Alcoa and Boeing.
Earlier Friday, the government said that consumer spending and incomes barely grew in November. The weak gains suggest that consumers may have trouble sustaining their spending into 2012.
In another worrying sign, a measure of business investment decreased for the second straight month. Business investment has been a pocket of strong demand and spending amid a sluggish recovery. A tax break that encouraged companies to invest in new equipment and facilities expires at the end of the year.
Hopes for the economy remained high after this week’s encouraging news about the job market and strong holiday sales for retailers.
Rambus, the technology licensing company, jumped 12.2 percent after it said it reached a patent license deal and settled a lawsuit with Broadcom, the chip maker.
TripAdvisor rose 6.1 percent, the most in the S. P. 500, as traders reassessed the value of the newly spun off travel review Web site. The stock had fallen since it started trading on Wednesday. It recovered some losses on Friday as analysts weighed its growing revenue.
Eastman Kodak rose 9.5 percent after it said its general counsel, Laura Quatela, would become co-president on Jan. 1.
Article source: http://www.nytimes.com/2011/12/24/business/daily-stock-market-activity.html?partner=rss&emc=rss