For Stocks, a Shiny New Quarter

Updated from 4:02 p.m. EDT

What a difference a day makes -- especially when it marks the beginning of a new quarter.

Stocks surged Friday, even as oil prices closed above $50 a barrel for the first time, on a beginning-of-the-quarter buying binge.

The Nasdaq closed up 45.36 points, or 2.39%, to 1942.20, and the S&P 500 gained almost 16.92 points, or 1.52%, to 1131.50 -- their highest closing levels since early July. The Dow Industrials added 112.38 points, or 1.11%, to 10,192.65, as the blue-chip index recovered from Thursday's loss. All three major indices closed sharply higher for the week.

For the week, all three indices finished higher. The S&P 500 finished up 1.9%, the Dow rose 1.4%, and the Nasdaq gained 62.72 points, or 3.3%.

Volume on Friday was strong on the NYSE and Nasdaq, with advancing issues ahead of declining ones by a ratio of 7 to 3.

The 10-year Treasury note was down 15/32 to yield 4.18%, while the dollar was higher against the euro and the yen. Gold was lower.

Nymex crude reveresed course, with the November futures contract adding 48 cents to $50.12 in regular floor trading. Short-term supply worries persisted as the Nigerian government negotiated with rebels who have disrupted production in the past week.

Market-watchers were hard-pressed to attribute the rally to anything fundamental.

"I'm going to attribute [today's rally], more than anything else, to the fact that it's a new quarter," said Joe Liro, equity strategist at Stone & McCarthy Research Associates. The fourth quarter has tended to be strong in recent years, he said, adding that Friday's "economic numbers were no better than mixed."

Liro sees a modest rally in the fourth quarter. "Hopefully, we get the market to rally back to the March highs that we saw in the spring time; we'll be lucky if we do much better than that though," he said. Over the "last four or five weeks, we've seen third-quarter estimates pared back by about a percent overall for S&P 500 companies, and that fact leaves room for more upside surprises than downside surprises as we start seeing those earnings numbers in about two weeks.