What a Week: Stocks Get Oil Change

"Resistance, resistance wherefore art thou," Shakespeare might say if he returned to life as a 21st century daytrader. For the second day in a row on Friday, the Nasdaq Composite tried and failed to close above its 2004 high of 2,153.83, set on Jan. 26.

Not that there's anything wrong with that: The tech-heavy index still finished the week with a gain of 2.2% thanks to oil's hefty drop midweek and Intel's (INTC Quote) upside surprise on Thursday night. That beat the Dow Jones Industrial Average and the S&P 500, which both climbed 0.7% for the week.

Prudential Equity Group chief technical analyst Ralph Acampora says despite the resistance, the Nasdaq is poised to breach the barrier and kick off another leg higher. "Any hesitation is considered healthy as it allows for normal near-term profit taking," he wrote on Friday. "These temporary reactions are taking place within the confines of strong uptrends that commenced for most indexes at their respective August lows."

Along with oil's fall, the week's gains were fed by some robust economic data. Offsetting the positives were renewed terrorist activity in Spain on Friday and the November payroll report, which must be counted as a severe disappointment.

The economy added only 112,000 jobs, the Labor Department said, well below the expected 200,000 following the 337,000 increase in October. Bond bulls had a field day and the yield on the 10-year Treasury note dropped to 4.27% on Friday from 4.40% on Thursday. Still the retracement brought the yield back only to about last Friday's range.

The market is still expecting the Federal Reserve to raise interest rates again this month despite the labor shortfall. Philadelphia Fed President Anthony Santomero said Friday that the central bank "should continue moving monetary policy toward a neutral stance at a measured pace." That mirrors the language of recent Fed statements accompanying the previous hikes and indicates little change in the outlook of top bankers.