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Dow extends run with 8th week of gains

Stocks rose Friday, closing an eighth straight week of gains, with the Dow Jones industrial average jumping to its highest close since September 2008.
/ Source: The Associated Press

Investors expecting a pullback in stocks — and there are plenty of them — are going to have to wait. As of Friday the Dow Jones industrial average marked its longest winning streak in more than six years, closing at its highest level since September 2008.

Stocks climbed again Friday after a strong report on new home sales offset mixed news from corporate earnings reports. Investors were also keeping a cautious eye fixed on Greece's ongoing debt problems after the country decided to tap a bailout program.

The Dow Jones industrial average closed the day higher for the 11th time in the past 12 trading days. Friday's 70-point gain wrapped up the index's eighth straight weekly rise, which matches its longest string of gains since a two-month stretch that ended in January 2004.

Analysts have been saying for weeks that the market could be primed for a pullback, yet it still hasn't materialized.

"It's been quite a run," said Stephen Carl, head of equity trading at The Williams Capital Group in New York. Carl said momentum could be slowing after stocks have been on a nearly unbroken path upward over the past two months.

The Dow is up 8.5 percent during its two-month climb. The pattern of slow, steady gains leads analysts to believe that investors are becoming less discerning in their stock picking, leaving the market vulnerable if sentiment shifts for the worse.

"The market is trying to sort out how overbought it is," said Nick Kalivas, vice president of financial research at MF Global in Chicago. "That's left us in a choppy state."

Volume has been low during the stretch, which analysts say is proof that investors are not fully confident that the gains are built on a solid foundations.

Despite that skepticism, stocks continued their recent pattern of slow but steady climbs upward Friday.

The Dow rose 69.99, or 0.6 percent, to 11,204.28 on Friday, closing near its high for the day.

The gains followed another report showing the economy is getting better. The Commerce Department said sales of new homes jumped 27 percent in March, bouncing off a record low in February. It was the best month since July and the biggest monthly increase in 47 years. However much of the recent big gains in home sales were likely fueled by customers who are trying to qualify for federal tax credits that will expire at the end of this month.

Friday was the second straight day the sector got good news. On Thursday, the National Association of Realtors said sales of existing homes also rose last month.

Joe Heider, principal at Rehmann in Cleveland, said the home sales report is a strong indication that consumers are growing more confident about the economy.

"We're seeing that people have the confidence to make the biggest purchase of their lives," Heider said. "And that bodes well for the markets."

Shares of homebuilders including PulteGroup Inc. and Lennar Corp. rose sharply as hopes grew that the troubled housing sector may finally be on the mend. Housing has been one of the hardest-hit sectors in the economy, helping to the economy into recession in late 2007.

Gold and oil rose after the housing report, pushing shares of energy and materials stocks higher throughout the day.

Dow components Microsoft Corp. and Travelers Cos. both fell after their quarterly results failed to impress investors. Travelers fell 41 cents to $53.38. Microsoft's shares fell 43 cents to $30.96.

The technology-heavy Nasdaq was hurt by a disappointing earnings outlook from Inc. Its shares fell $6.46, or 4.3 percent, to $143.63.

Homebuilders were the big gainers on the day. Pulte shares rose 71 cents, or 5.7 percent, to $13.19. Lennar jumped 79 cents, or 4 percent, to $20.53.

Five stocks rose for every two that fell on the New York Stock Exchange. Consolidated volume came to 5.4 billion shares, vs. 6 billion shares Thursday.

In Europe, stock indexes rose after Greek officials said they would tap a rescue package from the 15 other countries that use the euro and the International Monetary Fund. The move gives Greece better interest rates on its debt than it would be able to get from private investors.

Some remained skeptical, however, if the bailout would provide a long-term solution to Greece's debt woes. Investors also expect that other weak European countries such as Portugal may require help, further undermining confidence in the euro, Europe's shared currency.

The euro did rebound late in the day against the dollar after touching its lowest level in a year against the U.S. currency earlier Friday.

Bond prices fell as investors moved into stocks. The yield on the benchmark 10-year Treasury note rose to 3.82 percent from 3.78 percent late Thursday.

Overseas, Britain's FTSE 100 rose 1 percent, Germany's DAX index gained 1.5 percent, and France's CAC-40 rose 0.7 percent. Japan's Nikkei stock average fell 0.3 percent.