What a Week: Fade to Green

For example, Home Depot's (HD Quote) auction of its supply business is expected to get competing $10 billion private-equity bids, Bloomberg reports.

Nevertheless, some market players remain wary the three-day advance can continue.

"I can't fight the tape, but I'm not convinced at all," Peter Costa, senior floor trader at Lipari Partners said Friday in an interview on TheStreet.com TV. "You can't discount the fact that companies are going to spend more to borrow. It's going to hurt profits. Everything is great now, but when earnings come out and [disappoint] because the cost of money is that much higher, this might disappear."

Costa, who describes himself as an optimist by nature, nevertheless believes the better trade is to short the market here. "I hate to see exuberance when I don't see the fundamentals to cause it," he says. "Interest rates are up, oil is high and it's going to affect the economy at some point down the road."

Crude prices did rise this week, settling above $68 per barrel on Friday. But compared with the 1970s, energy is less a portion of consumers' income and far less of an important input cost for business. In addition, bulls say the current strength in oil prices is a reflection of a surging global economy, a.k.a. a "demand shock" vs. the "supply shock" of the 1970s. Finally, energy has become a bigger portion of the S&P 500, so crude's rise helps the stock market as it boosts shares of producers such as ExxonMobil (XOM Quote) and ConocoPhillips (COP Quote), among this week's big gainers.

Freeport McMoRan (FCX Quote) was another standout this week, benefiting from strength in copper prices, as well as the robust M&A environment and trend of activist fund managers. On Monday, Atticus Capital revealed a 6.4% stake in the miner and advocated for actions to enhance shareholder value. On Wednesday, the company's CEO said it may sell some "non-core" assets to pay for the debt incurred in its $26 billion acquisition of Phelps Dodge.

In sum, liquidity remains robust, the global economy strong and stocks remain attractive, even as Treasury yields have risen. That's the message at the end of a wild week that again reminded investors there's no upside to negativity in this market.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting