Market Ends Week Up 1%

With all the doom and gloom stories about the stock market lately, the reality is that the Dow still gained on the week.

U.S. stocks end higher amid bargain-hunting: Dow gains 1% for the week after up-and-down ride

NEW YORK (MarketWatch) -- U.S. stocks shifted gears yet again Friday to close with modest weekly gains as an erratic market closed a roller coaster ride focused on the credit crunch and its impact on the financial sector and the overall economy.

"This market is over-sold in the short-term, so although we're getting more bad news today, investors are seeking out bargains as the week winds down," said Art Hogan, chief market strategist at Jefferies & Co.

"Position squaring ahead of the weekend due to the options expiration is also affecting trade. The net result is erratic and seemingly random market action," said Frederic Ruffy, an analyst at Optionetics.

You have to bear in mind that by this time of the year, your professional investors and fund managers are looking to lock in profits so they can make their bonus goals.

So all other things held equal, you will get some significant market volatility anyway due to them selling off positions, shift the money to fixed income securities for a few days to let the dust settle, and then buying right back back in doing some bargain hunting.

Is the macro-economy slowing down? Sure. Is there troubled waters in the lending industry? Certainly. Is inflation edging up? Yes. But unemployment is still near the natural rate of unemployment and interest rates are low.

It's hardly "buddy can you spare a dime" time.