NEW YORK - Wall Street ended a bullish week with a modest advance Friday as strong economic data encouraged investors and sent the Standard & Poor's 500 index to a four-year high for the second straight session.
Government economic reports were unabashedly positive, just as they were in the previous session. The Labor Department's Producer Price Index, which measures inflation in wholesale prices, was flat in June, while "core" PPI - with food and fuel costs removed - fell 0.1 percent.
In addition, the Federal Reserve reported industrial production surged 0.9 percent in June, the biggest jump in 14 months. And business inventories rose by a meager 0.1 percent in May, according to the Commerce Department, meaning that sales are brisk and businesses aren't stuck with large inventories.
But some analysts questioned the week's move higher as overdone - the Dow Jones industrials gained 1.83 percent, for example - and predicted that a selloff was imminent.
"If you look around, is this economic data really worth the jump we had?" said Bill Groenveld, head trader at vFinance Investments. "I don't think so, and that means we'll probably have to have a pullback at some point. We still have oil out there, and we still have the Fed."
After spending most of the session in negative territory, the Dow rose 11.94, or 0.11 percent, to 10,640.83. It was the Dow's best close since March 16.
Broader stock indicators closed modestly higher after also trading lower much of the day. The S&P 500 rose 1.42, or 0.12 percent, to 1,227.92, and the Nasdaq composite index gained 3.96, or 0.18 percent, to 2,156.78, beating the previous session's 2005 high.
Positive inflation data, reports of strong retail sales activity and a sharp dropoff in oil prices combined to give Wall Street a very strong week. The S&P climbed 1.33 percent over the course of the week and the Nasdaq rose 2.08 percent.
Meanwhile, bonds traded in a narrow range for much of Friday and ended slightly higher, with the yield on the 10-year Treasury falling to 4.17 percent from 4.18 percent late Thursday. The dollar rose against most major currencies due to the strong economic data, while gold prices moved lower.
Crude oil futures rose as investors worried about potential damage from Hurricane Emily to oil facilities in the Gulf of Mexico. A barrel of light crude settled at $58.09, up 29 cents, on the New York Mercantile Exchange.
The S&P and Nasdaq have been up for seven straight sessions, while the Dow has climbed six of the last seven trading days. With little economic news due in the coming week, analysts warned that the stock market will require other bullish catalysts for the rally to continue.
"This thing just has to grind higher, little by little, until we get something big," said Scott Wren, equity strategist at A.G. Edwards & Sons. "There aren't any big singular events on the horizon, other than maybe the Fed signaling (at its Aug. 8 meeting) that it'll pause on interest rates. So we just keep at it, buying when it pulls back, riding when it grinds forward."
While few investors could argue with General Electric's 24 percent rise in quarterly profits, its earnings of 44 cents per share - in line with Wall Street's forecasts - failed to generate any excitement. The conglomerate, seen as a barometer of the overall market, also lowered its third-quarter earnings projections. GE slipped 10 cents to $35.53.
Fellow Dow component Hewlett-Packard Co. added 32 cents to $24.94 after The Wall Street Journal and CNET's News.com reported the computer maker will undergo a major restructuring. As many as 15,000 jobs could be cut, News.com reported.
McDonald's Corp. reported strong gains in monthly sales, crediting its new fruit salad for bringing in more customers. The fast food chain also reported strong international sales and boosted its quarterly earnings forecasts. McDonald's gained $1.39 to $30.99.
Vaccine maker Chiron Corp. lost $1.24 to $36.03 after slashing its expected flu vaccine shipments; the company discovered tainted vaccines in a German production plant.
Advancing issues barely outnumbered decliners New York Stock Exchange, where preliminary consolidated volume came to 1.74 billion shares, compared with 2.02 billion traded on Thursday.
The Russell 2000 index of smaller companies was up 0.72, or 0.11 percent, at 663.74.
Overseas, Japan's Nikkei stock average fell 0.05 percent. In Europe, Britain's FTSE 100 was down 0.55 percent, France's CAC-40 rose 0.07 percent for the session, abd Germany's DAX index gained 0.29 percent.