Investors pushed stocks higher for the fourth straight week despite rising interest rates amid disappointing Treasury sales. Renewed concerns regarding the sovereign debt crisis in Europe failed to dissuade optimism on Wall Street.

For the week, the Dow Jones Industrial Average climbed 108.38 points, or 1.01%, finishing at 10,850.36. The S&P 500 added 16.6 points, or 1.44%, ending at 1,166.59. The Nasdaq Composite gained 27.47 points, or 1.16%, closing at 2,395.13.

Even with the dollar appreciating against a basket of currencies due to lingering concerns about Greece’s ability to service its debt, oil held firm settling near $80.11 per barrel on Friday. Energy stocks were the laggards last week, followed by the health care sector, materials and utilities. Discretionary and financial stocks led the way higher, and Apple (AAPL) hit a new all-time high after Credit Suisse raised its price target from $275 to $300.

At the macro level, the economy expanded by a healthy 5.6% during the fourth quarter, coming up just shy of expectations. Still, growth has stabilized thanks largely in part to federal spending and a pickup in discretionary spending.

Consumer sentiment edged higher, according to the Reuters/University of Michigan index which produced a final March reading of 73.6. That was a very modest improvement from the 72.5 mid-month reading.

Sentiment is stabilizing thanks to bullish momentum on Wall Street, covering up sustained weakness in the housing and labor market. New home sales took a dip in February, falling 2.2 percent to an annual rate of 308,000. That followed annual rates of 315,000 in January and 345,000 in December. With foreclosures remaining heightened, the White House has drafted a $14 billion plan aimed at providing lenders with incentives to cut debt and payments for those who are unemployed.

On the labor front, jobless claims fell by 15,000 to 442,000 in the March 20 week, sending the four-week average to a recent low of 453,750. Continuing claims dropped to a near-term low of 4.689 million over the last four weeks. Friday’s labor report should serve to further clarify whether steadily declining jobless claims are being reflected in the aggregate employment picture.

New orders for durable goods strengthened over the past several months. February orders were soft, up 0.5%, but January orders were revised up to a surging 3.9% increase.

In addition to being the end of the quarter, this holiday-shortened trading week is loaded with important news, highlighted by the official unemployment report for March. Macroeconomic data scheduled for release this week includes:

Monday – Personal Income and Outlays (February)
Tuesday – S&P Case Shiller Home Price Index (January), Conference Board Consumer Confidence (March)
Wednesday – Factory Orders (February), Chicago PMI (March), ADP Employment (March), Crude Inventories (Weekly)
Thursday –Jobless Claims (Weekly), ISM Mfg Index (March), Construction Spending (February) , Motor Vehicle Sales (March), Federal Reserve Balance Sheet, Money Supply
Friday – Employment Report (March)

Stocks drifted higher last week on light trading volume as major indices flirted with multi-month highs amid mixed economic data. The Dow and S&P are near 15-month highs, while the NASDAQ surpassed an 18-month high.

Last week, the Dow added 59.49 points, or 0.6%, to close at 10,624.69. The S&P rose 11.29 points, or 1%, ending at 1,149.99. The Nasdaq gained 41.31 points, or 1.8%, to close at 2,367.66.

On the jobs front, the number of newly laid-off workers seeking unemployment benefits slipped last week, as claims fell by 6K to a seasonally adjusted 462K. The recent survey was close to analysts’ projections, which was for an even greater decline to 460K claims. It also marked the second straight weekly decline in initial claims.

Of greater concern though, the number of people continuing to receive jobless benefits advanced by nearly 40K to more than 4.56M claims. However, almost 5.7M people were receiving extended benefits, down from 5.9M the previous week.

Within the housing industry, those who are on the verge of foreclosure may not be out of the woods yet. According to RealtyTrac Inc., the number of U.S. households facing foreclosure increased by 6% in February over last year’s tally, the smallest annual increase in four years.

In the report, more than 308K homeowners received a foreclosure-related notice, although it was down more than 2% from January. That equates to one in every 418 homes receiving a notice.

Banks repossessed nearly 79K homes last month, down 10% from January’s totals, yet still up 6% from February 2009. In 2009 alone, there was a record 2.8M households that were served with a foreclosure notice last year, and that number is expected to eclipse the 3M mark this year.

The U.S. posted its largest monthly deficit in history during February. The imbalance totaled $220.9B, 14% higher than the previous record deficit established in February of 2009. Through the first five months of the government’s fiscal year, the trade imbalance currently stands at $651.6B, nearly 11% higher than this time last year.

With a projected fiscal budget for 2010 potentially hitting an all-time high of $1.56 trillion, February’s report showed outlays of $328.4B and revenues of $107.5B. It was the first time in nearly two years that revenues were up. Through the first five months, revenues totaled $800.5B, 7% lower than from a year ago, while outlays totaled $1.45 trillion, up marginally from a year ago.

The trade deficit unexpectedly contracted in January, as U.S. demand for foreign cars and oil lessened, helping to narrow the trade gap. For the month, the deficit retreated to $37.3B, a 6.6% decrease compared to December’s deficit of $39.9B. On average, economists were looking for the trade gap to have widened to $41B.

In January, U.S. exports declined by 0.3%, as overseas needs for American built aircraft and machinery dwindled. The 0.3% drop left the total amount of exports at $142.7B for the month. Meanwhile, imports plunged by 1.7% in January, as many consumers have curtailed demand for oil and foreign automobiles. With imports declining, that left the overall tally at $180B.

Companies further reduced their inventories at the wholesale level in January, despite sales increasing for the 10th straight month. Wholesale inventories declined 0.2% during the month, following a 1% decrease in December. Economists were looking for inventories to post a modest increase of 0.2%.

Supplies at the wholesale level have declined for 13 consecutive months and have posted a decrease in 15 of the past 17 showings. The two gains in wholesale inventories occurred last October and November. Nevertheless, sales at the wholesale level posted a 1.3% gain in January, its best showing since a 3.6% surge last November.

Business inventories in January remained unchanged, according to the Commerce Department. Companies remain hesitant about restocking their depleted inventories amid a sluggish economic recovery. The unchanged reading in inventories was weaker than the 0.2% gain that economists had anticipated.

Meanwhile, total business sales advanced for the eighth consecutive months, posting a gain of 0.6% in January. The solid showing follows December’s even stronger reading of a 1% increase.

Despite inventories remaining at all-time lows, retail sales posted a surprise increase in February. During the month, sales advanced by 0.3%, its largest increase since last November, while surpassing the 0.2% gain economists had projected.

The 0.3% gain in February followed a 0.1% rise in January. The overall reading was hurt by a 2% decline in auto sales following Toyota’s mass recalls during the past few months. However, excluding autos, retail sales would have posted an even higher 0.8% gain, well ahead of the 0.1% gain economists had forecasted.

Data for this week includes Philadelphia Fed, Empire Manufacturing Survey and the FOMC Rate Decision report for March, Capacity Utilization, Industrial Production, Building Permits, Import/Export Prices, Housing Starts, PPI, CPI, and the Leading Indicator reports for February, net Long-Term TIC Flows for December, the Current Account Balance for the fourth quarter, and weekly results for Initial Claims and Crude Inventories.

Bulls stampeded down Wall Street last week, induced by strong reports on the jobs market, productivity and factory orders.

The Dow climbed 240.94 points, or 2.3%, to close at 10,566.20, the S&P rose 34.20 points, or 3.1%, ending at 1,138.69, and the NASDAQ gained 88.09 points, or 3.9%, to close at 2,326.35.

On Friday, the Labor Department announced the unemployment rate held steady at 9.7% for February, a better showing than the modest increase to 9.8% economists predicted. During the month, employers cut more than 36K jobs, well short of the 50K that analysts expected. Within the report, the average workweek for employees retreated from 33.9 hours in January to 33.8 hours.

Employers in the private sector reduced their work staff at a slower pace in February compared to the previous month. More than 20K jobs were lost during the month, well below the 60K that was lost in January, according to ADP’s forecast. The overall job loss was in-line with analysts’ estimates.

The number of newly filed claims for unemployment benefits for the week ending February 27 fell by 29K to a seasonally adjusted rate of 469K. The reading comes in nearly on target of the 470K economists had projected. Furthermore, the number of those continuing to receive benefits slipped to 4.5M, falling more than what economists anticipated.

In the housing sector, pending home sales plunged in January. The drop is being attributed to an increase in severe weather throughout the country, which dampened sales. The National Association of Realtors revealed that their housing index showed sales plummeting 7.6% from December to January with a reading of 90.4. The current data was the lowest reading since last April. Economists were looking for the index to advance to a reading of 97.6.

The U.S. service sector expanded in February, growing at its fastest pace in more than two years. The ISM reported last week that its index measuring service industries posted a reading of 53, up from a reading of 50.5 in January. Economists had been looking for the index to advance marginally, up to a reading of 51.

Meanwhile, a gauge of current economic activity posted a 2.6% increase to 54.8. Additionally, new orders, which is another important leading indicator of the ISM Service index, advanced by 0.3 points to a reading of 55.

During Q4 of 2009, productivity expanded at a much faster pace than previously projected, helped by a huge decrease in unit labor costs. For the quarter, productivity advanced at an annual rate of 6.9%, well ahead of the 6.2% growth rate expected. As for unit labor costs, it declined at a rate of 5.9%, much larger than the 4.4% drop analysts predicted.

Throughout all of 2009, productivity from nonfarm workers advanced by 3.8%, almost double the 2% increase in 2008. The 6.9% growth rate was the fastest annual increase in productivity since a 4.6% increase in 2002.

With productivity increasing, factory orders followed suit. In January, orders increased by 1.7%, marginally lower than the 1.8% gain economists had expected. The advancement was led by a 118.6% surge in demand for commercial aircraft. Excluding transportation, orders were up a more modest 0.1%.

Orders for durable goods increased 2.6%, slightly lower than the 3% estimate the government made last week. Moreover, orders for nondurable goods increased by 0.9% in January, following a 1.3% gain in December.

In a reading from the Federal Reserve’s Beige Book survey, analysts found that the nation’s economic recovery continues to march forward, albeit at a much slower pace than what was first anticipated. The Fed stated, “Economic conditions continued to expand … although severe snowstorms in early February held back activity in some places.”

Following a surge in economic growth to end 2009, the first quarter in 2010 lost precious momentum causing economists to lower their prediction of economic growth to around 3% for the January to March period.

Economic data slated for this week includes the Wholesale Inventories, Trade Balance and the Business Inventory reports for January, as well as weekly results for Initial Claims and Crude Inventories. The Treasury Budget and Retail Sales reports for February, along with the Michigan Sentiment report for March are also due out.

Stocks held onto early week gains after stumbling into the weekend in the wake of the Federal Reserve’s move to increase the discount rate 25 basis points to 0.75%. Markets rallied despite mixed earnings reports thanks to several encouraging economic reports.

The Dow climbed 303.21 points, or 3.0%, to close at 10,402.35. The S&P rose 33.66 points, or 3.1%, ending at 1,109.17. The NASDAQ gained 60.34 points, or 2.8%, to close at 2,243.87.

On the housing front, construction of new homes surged 2.8% in January to a seasonally adjusted rate of 591K units. The recent reading was well ahead of the 580K economists were anticipating and the highest level reached in the past six months. Still, applications for building permits slipped 4.9% during the month to a rate of 621K. Permits, which are considered a good indicator of future activity, posted its first decline in the past three months.

The nation’s industrial production advanced in January, climbing 0.9%, marking the seventh straight month of expansion. There was growing progress in the country’s manufacturing, mining and energy utilities, marking the first time since August 2009 that all three major categories posted gains.

During the month, manufacturing increased by 1%, while mining and utilities each gained 0.7%. January’s results were a welcome sign after mining activity fell 0.2% and manufacturing slipped 0.1% in December. The nation’s industries were operating at 72.6% of capacity in January, a 0.7% increase from December.

The Labor Department released a report last week showing that import prices jumped 1.4% in January, much higher than the revised 0.2% gain recorded in December. On a year-over-year basis, import prices have surged 11.5%.

The advance in import prices was a direct result of imported fuel, which saw prices jump 5.3% following a 0.6% decrease in December. Import fuel prices were greatly affected by a 4.8% increase in petroleum prices and an 18.8% gain in natural gas prices.

The report showed that export prices increased for the third consecutive month as prices rose by 0.8% in January. That followed a 0.6% increase the month before. The increase in export prices was due in large part to a 1.4% jump in agriculture prices. Compared to this time last year, export prices have increased by 3.4%.

Wholesale prices more than doubled in January, igniting worries about price increases. For the month, the Producer Price Index jumped 1.4%, doubling the 0.7% gain economists had predicted. The gains in prices were lead by a surge in costs for gasoline and other energy goods.

Excluding food and energy costs, the core inflation rate at the wholesale level advanced by 0.3%, tripling the 0.1% gain economists were projecting. Throughout the past year, wholesale prices were up 4.6%, while core prices were up a more modest 1%.

Yet inflationary fears eased after the CPI report. Consumer prices advanced at a slower-than-anticipated rate in January as the CPI rose 0.2%, while core inflation, those prices excluding food and energy costs, decreased by a modest 0.1%. It was the first time in more than 25 years that core prices dropped.

The 0.2% gain in overall prices was a direct result of a 2.8% jump in energy costs, lead by a 4.4% jump in gasoline prices and a 3.5% increase in natural gas charges. The nearly 3% surge in energy prices was the highest since last August.

With Greece’s debt problems at the forefront of market activity over the past few weeks, the U.S. debt load has come under increasing scrutiny. After the first four months of the fiscal year, the nation’s annual budget is currently running at an elevated rate. In January, the deficit totaled $42.6B, which pushed the budget into the red at $430.7B, 8.8% higher compared to the same period a year ago. President Obama announced during the week that this year’s deficit would hit $1.56 trillion and would most likely remain above the $1 trillion mark for the next three years.

The labor market remains a major source of concern for the U.S. Weekly data showed that the number of newly unemployed workers for the week ending February 13 advanced unexpectedly, increasing by 31K claims to a seasonally adjusted rate of 473K.

A forecast of future economic activity advanced for a 10th consecutive month in January as the index of leading economic indicators climbed 0.3%. The current reading comes in much weaker than the 1.2% rise in December and well short of the 0.5% gain that economists had expected. With the continued recovery within the nation’s manufacturing industry and a surge in the stock market, the index has steadily increased for nearly a year.

Data due up this week includes New Home Sales, Existing Home Sales, and the Durable Orders reports for January. Also, the second estimate readings for GDP for the fourth quarter, the Case-Shiller 20-city Index and the FHFA Housing Price Index for December is due out, along with Consumer Confidence, the Chicago PMI and the final reading for the Michigan Consumer Sentiment report for February. Weekly results for Initial Claims and Crude Inventories are scheduled as always.

The markets fluctuated erratically throughout last week’s trading, posting triple-digit gains and losses. The week’s highs and lows were attributed to investors taking heed of economic news that influenced sentiment throughout the sessions. Adding to the indecision was news from Fed Chairman Ben Bernanke, who revealed plans on how to reduce the need of financial stimulus to the central banking system.

The nation’s trade deficit expanded at a much faster than expected pace in December, as the imbalance came in at $40.2B, an increase of more than 10% from November’s reading and the largest disparity in the past year. Expediting the surge was the country’s increased demand for oil and additional imports. Economists were looking for the deficit to come in around $36B.

Looking further inside the report, exports of goods and services advanced for an eighth consecutive month, increasing 3.3% to $142.7B, while imports expanded 4.8% during the month to, $182.9B. Imports were led by a 14.8% jump in oil imports, leading to its highest level since October 2008. By the end of 2009, the U.S. deficit receded to $380.7B, more than $315B less than the $695.9B deficit for 2008.

A report from the Labor Department revealed that the number of recently out-of-work employees declined more than anticipated for the week ending February 6. Surprisingly, initial claims fell by 43K claims to a seasonally adjusted rate of 440K. Economists were looking for first time filings to decline at much slower pace of 15K.

Initial claims are now approaching their lowest levels, which were established last December, when claims dropped to their lowest point in almost 18 months. Last week, the unemployment rate slipped to 9.7%. The drop was aided by the number of continuing claims decreasing by 80K, to an adjusted rate of 4.5M. Additionally, there were nearly 5.7M people receiving extended benefits in the week ending January 23, down from nearly 5.9M the previous week.

The National Association of Realtors announced last week that the median price, for existing homes sold, increased in 67 out of 151 metropolitan cities during the 4Q. With 40% of U.S. cities showing price improvements, that is a sharp improvement from the 3Q, when prices increased in only 20% of the cities surveyed. For the quarter, the national median price for existing homes was almost $173K, 4.1% below the same period from a year ago.

Representing nearly 70% of all economic activity, consumer spending plays a key role in the nation’s health. With that, the Commerce Department revealed that retail sales recorded a better-than-expected jump in January of 0.5%, the best showing since a 2% jump in November. The increase in sales was also better than the 0.3% gain economists had anticipated. Excluding the sale of autos, sales advanced at a 0.6% clip, also better than expected.

America’s businesses cut its stockpiles during December, as inventories were reduced by 0.2%, the opposite of the 0.2% gain economists were looking for. The back-and-forth between monthly gains and losses produced cautious behaviors from businesses as the strength and durability of the economic recovery remains in question. However, overall business sales rose 0.9% in December following a 2.4% surge in November.

The week ahead will see a handful of economic data released that will include the Treasury Budget, Building Permits, Import/Export Prices, Housing Starts, Capacity Utilization, Industrial Production, PPI, Leading Indicators and CPI reports for January.

The upcoming week will also include the Philadelphia Fed report for February, as well as weekly results for Initial Claims and Crude Inventories.

The DOW closed the week higher, climbing 86.91 points, or 0.9%, to close at 10,099.14. The S&P also finished the week in the green, rising 9.32 points, or 0.9%, ending at 1,075.50. The NASDAQ concluded the week up, gaining 42.46 points, or 1.9%, to close at 2,183.58.