Wall Street Maintains Rally on Retail Hopes

Broad stock market indexes posted their seventh consecutive daily advance Friday, eking out small gains in a half-day session on Wall Street.

The buying was enough to lift several indexes to multiyear highs, building on November’s strong rally in share prices.

Reports of busy malls nationwide, as the holiday shopping season kicked off, helped keep investors in a good mood.

“As far as holiday sales are concerned, we’re well primed for some outperformance,” predicted Brian Slater, who helps oversee $500 million at Condor Capital Management in Martinsville, N.J. “Energy costs have pretty much come down, and that’s relieved investors” because it may give consumers more spending power, he said.

The Standard & Poor’s 500 index edged up 2.64 points, or 0.2%, to 1,268.25, another in a string of new 4 1/2 -year highs.

The technology-dominated Nasdaq composite also reached its highest level in 4 1/2 years, adding 3.03 points, or 0.1%, to 2,263.01.

The Dow Jones industrial average rose 15.53 points, or 0.1%, to 10,931.62, still below the multiyear high of 10,940.55 set March 4.

Rising stocks outnumbered losers by 3 to 2 on the New York Stock Exchange, although relatively few shares traded in the abbreviated session, which ended at 10 a.m. Pacific time.

For the week, the Dow gained 1.5%, the S&P; 500 rose 1.6% and Nasdaq was up 1.6%. This year, the Dow is up 1.4%, the S&P; is up 4.7% and Nasdaq is 4% higher.

Key indexes have rallied for at least five straight weeks, boosted by optimism about the economy as oil prices have fallen and as long-term Treasury bond yields have slipped from recent peaks. Generally strong third-quarter corporate earnings reports also have underpinned the market.

The calendar also is helping: Because the market typically rallies in December, some traders are jumping in, betting that the momentum will continue.

In the bond market Friday the 10-year Treasury note yield, a benchmark for mortgages, slipped to 4.43%, down from 4.47% on Wednesday and from 4.49% a week ago. The yield’s recent peak was 4.66% on Nov. 4.

There was no trading in commodities Friday. Near-term oil futures ended Wednesday at $58.71 a barrel. That was up from $56.14 a week ago but down from about $63 in mid-October.

Many investors are anxiously awaiting holiday sales figures to see how consumers are coping with the run-up in gasoline prices this year, and whether the recent decline in prices is allowing them to feel better about spending on other things.

A national consumer confidence survey by the University of Michigan, reported Wednesday, showed a rise in confidence this month compared with October.

Investors also will be focusing on other economic data in coming weeks for clues to the Federal Reserve’s likely course with short-term interest rates. Some analysts said the minutes of the Fed’s Nov. 1 meeting, which the central bank made public Tuesday, gave hints that policymakers might be finished tightening credit with two or three more increases in their key rate, now at 4%.

A surge in financial services companies’ shares in recent weeks has suggested that investors believe the Fed is nearly done raising rates. An S&P; index of 84 major financial stocks has been hitting record highs this week and is up 6.5% this month, compared with a 5.1% rise for the S&P; 500.

Because higher interest rates have squeezed many financial companies’ earnings this year, the rebound in the stocks could mean that investors expect rates to stabilize or fall in 2006.

Among Friday’s market highlights:

* In the financial sector, Washington Mutual added 44 cents to $43.17, Alliance Capital gained $1.01 to $55.16 and Lehman Bros. was up 66 cents to $132.83.

* Google continued to streak higher, helping to lift Nasdaq. The Internet search giant’s shares rose $5.76 to a record $428.62. Semiconductor-related stocks also were strong.

* In the retail sector, Best Buy jumped $1.63 to $50.63 and GameStop surged $1.08 to $36.54, but Sears fell $2.02 to $119.15 and Wal-Mart lost 8 cents to $50.49.