What a Week: Green Apple

Shares of other technology companies also rose sharply on the week. Intel(INTC Quote), Google(GOOG Quote), Microsoft(MSFT Quote) and Yahoo!(YHOO Quote) jumped between 3.7% and 6.2% each on the week.

Even negative news such as earnings warnings from companies such as SAP AG and Advanced Micro Devices(AMD Quote) didn't hamper the sector's rally. Shares of AMD fell 9.5% on Friday, while SAP's shares gained 3.1% Friday after shedding 10.4% Thursday.

The money that fueled the tech rally rotated out of energy stocks as light, sweet crude oil fell 4.7% in the week. Shares of Exxon Mobil(XOM Quote), Chevron(CVX Quote), and ConocoPhillips(COP Quote) slipped this week. The shares rebounded Friday with oil, which bounced 2.1%, but they didn't make back the week's losses.

The drop in oil underscored a week filled with data that revealed the economy landed softly and has actually taken off again. Lower oil will help keep inflation down, offsetting the strong labor market and allowing the Fed to stay on hold.

"We had the landing in the third quarter of 2006," says Michael Darda, chief economist at MKM Partners. "The debate about the slowdown is here and gone."

Darda predicts fourth-quarter gross domestic product growth at 3.5%.

Darda's estimate is on the high side of consensus, but many other economists increased their fourth-quarter GDP estimates this week given evidence of strong export growth, which revealed a narrower trade deficit, robust retail sales for December and more strong employment data. Many now believe the fourth quarter of 2006 will reflect an acceleration of economic strength, which puts the Fed far from any rate cuts.