Stock prices finished the first full week of 2007 with solid gains and a new record high for the Dow industrials. Investors were cheered by strong retail sales and lower oil prices.
The Dow Jones industrial average gained 41.10 points to 12,556.08, its second consecutive record closing high. the Nasdaq composite index rose 17.97 points to 2,502.82, its highest close in six years.
The financial markets will be closed Monday to observe Martin Luther King Day.
Retail sales rose by 1.0 percent in December. The Commerce Department said the bigger than expected increase was the result of strong electronics sales during the holiday shopping season.
Despite a gain in oil prices Friday, crude closed out the week with big losses. Oil ended at $52.99 a barrel, up $1.11. However, for the week crude declined six percent in is down 13.2 percent in 2007.
Stocks held on to their gains despite a warning from chip maker Advanced Micro Devices Inc. (NYSE: AMD), considered one of the bellwether stocks of the tech sector.
"You've had a pretty good week, and people always tend to even up positions on a Friday -- especially before a holiday," said Alexander Paris, an economist and market analyst for Chicago-based Barrington Research.
For the week, stocks advanced modestly and, as a result, managed to push the indexes into positive territory for the new year. The Dow was up 1.27 percent, while the S&P 500 advanced 1.49 percent and the Nasdaq picked up 2.82 percent.
The bond market, which has been pricing in the potential of a rate cut sometime with the first half of the year, was rattled by the economic reports Friday. The yield on the benchmark 10-year Treasury note rose to 4.78 percent -- its highest level since October -- from 4.74 percent late Thursday.
The dollar was mixed against other major currencies, while gold prices rose.
"The mood isn't negative," said Brian Williamson, an equity trader at The Boston Company Asset Management, a subsidiary of Mellon Financial Corp. "You take the economic news as it comes. Things are changing so rapidly, and there's so much information right now, but you react and then look ahead. That's what the market is doing."
Investors pushed oil stocks higher on belief a production cut could help anchor profits for the sector. ConocoPhillips (NYSE: COP) rose $2.01, or 3.3 percent, to $63.83. Exxon Mobil Corp. (NYSE: XOM) picked up $1.68, rising to $72.66.
Murphy Oil Corp. (NYSE: MUR) rose 36 cents to $46.61 as investors shrugged off a warning from the oil and gas refiner warned fourth-quarter profit will come below expectations.
Technology stocks, which have been among the market's biggest gainers so far this year, extended their advance despite a warning from AMD that fourth-quarter results will be lower than expected. AMD plunged $1.92, or 9.5 percent, to $18.26.
Meanwhile, business software maker SAP AG's (NYSE: SAP) warning that quarterly profit and revenue would fall short of expectations caused a round of analyst downgrades. However, the stock was able to stay in positive territory, rising $1.52, or 3.1 percent, to $50.02.
Apple Inc. (Nasdaq: AAPL) backed off an all-time high reached earlier in the week after it unveiled plans to roll out its iPhone later this year. A trademark lawsuit filed by Cisco Systems Inc. (Nasdaq: CSCO) pushed Apple shares lower by $1.18 to $94.62.
Cisco shares rose 23 cents to $28.92.
Cablevision Systems Corp. (NYSE: CVC) fell after the family that founded the company raised its buyout bid in what they called the "best and final offer." However, investors sent the stock down $1.21, or 4.1 percent, to $28.39 as it appeared a more lucrative offer is now unlikely.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.93 billion shares compared with 2.92 billion traded Thursday.
The Russell 2000 index of smaller companies rose 5.81, or 0.74 percent, to 794.26.
Overseas, Japan's Nikkei stock average closed up 1.30 percent. At the close, Britain's FTSE 100 was up 0.14 percent, Germany's DAX index rose 0.27 percent, and France's CAC-40 added 0.14 percent.
The Associated Press contributed to this report.
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