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) -- With the July Fourth holiday coming in the middle of the week, market watchers anticipate Friday's rally could continue to build early on but caution that the euphoria over latest Europe's debt crisis plan may not last much longer than that.

"The markets could continue to rally and have been looking for a reason to rally," said Adrian Day, president of Adrian Day Asset Management. "They were looking for a) movement in Europe and b) stimulus, and they got both."


Dow Jones Industrial Average

soared nearly 278 points, or 2.2%, to close at 12,880 on Friday. The blue-chip index rose 1.9% for the week and finished June with a gain of nearly 4%. Despite a 2.5% decline in the calendar second quarter, the Dow is now up 5.4% so far in 2012.


S&P 500

surged 33 points, or 2.5%, to finish Friday at 1362, right at its high for the day. The benchmark index advanced 2% for the week, putting it up 4% for the month. Although the S&P 500 fell 3.3% during the quarter, it's appreciated 8.3% year-to-date.



jumped nearly 86 points, or 3%, to settle Friday at 2935, logging its fourth straight weekly gain. The index booked a 1.5% rise for the week and added 3.8% in June. For the year, the Nasdaq is up 12.7%, but it lost 5% in the calendar second quarter.

In part because of the midweek holiday, the coming week could be one of the lowest volume stretches of the year, according to Uri Landesman, president of Platinum Partners, who thinks cumulative trading action will be in the bottom five for 2012. Landesman is bearish about how the next few months will play out.

"This summer people will think

TheStreet Recommends

their money is better in

their mattress than in the stock market," he said.

Landesman expects the S&P 500 to trade within a range of 1290 to 1360 in the short term and says the overall trend will be downward further out, predicting the S&P 500 could "easily" correct by 150 points into Labor Day with the action marked by summer's characteristic low volume and high volatility.

Tim Holland, a portfolio manager at TAMRO Capital Partners, however, offered a contrasting view on volume for the coming week and the rest of summer. His says there is simply too much important news, pointing to Thursday's decision by the Supreme Court on Obamacare, recent events in Europe and the upcoming U.S. election.

He's also not ready to give the all-clear signal on where U.S. stocks head from here.


Friday's rally, people are still fundamentally very cautious, very concerned and really don't know what's ahead," Day said.

For his part, Adrian Day is looking for the S&P 500 to climb to the 1400-1420 range in the next few weeks, but he threw in the caveat that skittish investors stand ready to sell on any and all negative headlines.

"I don't think the dynamics of this rally are strong enough to ignore bad news," Day said. "People like to be neutral ahead of a holiday when other markets are trading."

Overnight on Thursday, European leaders said they are working on measures to

lower borrowing costs for Italy and Spain in the near term

as well as a

$149 billion eurozone economic growth plan


Day described the progress in Europe as "dealing with a small part of the problem" and said he expects more bumps in the road. "Over the ensuing months we will have more bad news out of Europe without a doubt," Day said.

As for next week's corporate news, there's very little in the way of earnings to look forward to. Names like

Acuity Brands

(AYI) - Get Acuity Brands, Inc. Report


International Speedway

(ISCA) - Get International Speedway Corporation Class A Report

are filling the role of headliners.

Acuity Brands, an Atlanta-based lighting products company, is slated to report its fiscal third-quarter results on Monday. Analysts, on average, anticipate earnings of 78 cents a share on revenue of $491.7 million in the May-ended quarter.

Daytona Beach-based motorsports entertainment company International Speedway is scheduled to report second-quarter earnings on Thursday. On average, analysts expect earnings of 40 cents a share on revenue of $158.65 million.

The only economic news that matters next week will be the June jobs report on Friday. The current consensus estimate, according to, is for an increase in nonfarm payrolls of 100,000, up from May's disappointing 69,000.

-- Written by Alexandra Zendrian in New York


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Alexandra Zendrian