Stocks closed higher Friday, rebounding from their biggest drop in nearly a month, as worries over Cyprus diminished and a batch of upbeat earnings reports were released.
Still, major averages finished in the red for the week. The Dow snapped a four-week win streak and the S&P 500 logged its second losing week this year.
The Dow Jones Industrial Average rallied 90.54 points, or 0.63 percent, to close at 14,512.03, lifted by Wal-Mart and Hewlett-Packard, but still finished lower for the week.
The blue-chip index is still on track for its biggest ever quarterly point gain.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, slid below 14.
For the week, the Dow slipped 0.01 percent, the S&P 500 dipped 0.24 percent, and the Nasdaq erased 0.13 percent. Cisco was the worst performer on the blue-chip index for the week, while Hewlett-Packard climbed.
For the week, materials led the key S&P sector laggards, while consumer staples rallied.
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"If the eleventh-hour solution doesn't manifest itself, then it will really get the market's attention because a precedent will be set and it will have implications for other struggling European countries," said Quincy Krosby, market strategist at Prudential Financial.
(Read More: Who Will Blink First? Europe or Cyprus)
Cyprus was close to a deal to raise billions of euros and unlock a bailout from the European Union that could avert a financial meltdown and its exit from the euro, its ruling party said.
The European Union issued the nation with an ultimatum to raise the 5.8 billion euros ($7.4 billion) necessary for a 10-billion euro bailout package by next Monday. The European Central Bank has said it will cut off liquidity to Cypriot banks without a deal. Cyprus' finance minister returned to Cyprus after two days of talks with Russian officials in Moscow but failed to deliver a deal to rescue the country.
Earlier, Cyprus agreed with Greece on a takeover of the Greek units of Cypriot banks, which ended uncertainty over the fate of those operations.
European shares trimmed their earlier losses to end flat.
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Meanwhile, some strategists pointed to the Federal Reserve's ongoing easy monetary policy as the reason for higher stock prices.
"With the $85 billion a month that the Fed is pumping into the market, this market only has one way to go and that's up," said Alan Valdes, director of floor operations and VP of trading at DME Securities. "And that's going to trump whatever's going on in Europe."
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Apple climbed amid reports the tech giant will unveil the iPhone 5s and the iPad 5 on June 29, according to tech website Gizmorati, citing an inside source and confirmation from a third party. The date would mark the sixth anniversary of the introduction of the original iPhone.
Among earnings, Nike soared to lead the S&P 500 gainers after the sports apparel retailer reported quarterly earnings that easily topped estimates and said future demand for its clothing and shoes gained. At least six brokerages lifted their price target on the company.
Tiffany rallied after the upscale jeweler said it sees worldwide sales gaining 6 to 8 percent this fiscal year and posted a better-than-expected profit.
Micron Technology posted a quarterly net loss, but surged nearly 10 percent after the chipmaker said the outlook for memory chip prices is improving.
Meanwhile, Tibco plunged after the business software maker forecast current-quarter results below estimates, citing execution challenges in North America and the UK.
And Darden Restaurants posted quarterly results that largely matched Wall Street's recently lowered estimates as consumers shied away from restaurants amid the payroll tax hike and higher gasoline prices.
JPMorgan held gains after the financial giant's board endorsed Jamie Dimon to remain both chairman and CEO.
Blackstone Group and General Electric's lending arm have discussed jointly pursuing Dell's financial-services business, the Wall Street Journal reported, citing people familiar with the matter. The New York Times also reported that Blackstone was weighing whether to make an offer for all or part of Dell, saying that some people close to the private equity firm are skeptical that an offer would materialize.
Pepsi gained after the U.K. Telegraph reported that investor Nelson Peltz has taken a stake in the beverage maker and Mondelez International and may push for a merger. Separately, Pepsi is redesigning its 20-ounce bottle for the first time in nearly 17 years.
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—Follow CNBC's JeeYeon Park on Twitter: @JeeYeonParkCNBC.