MARKET SNAPSHOT: U.S. Stocks Rise; S&P 500 Hits 1,900

By Victor Reklaitis and Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- After three straight days of advances, the U.S. stock market finished the week with solid gains, sending the S&P 500 above the 1,900 level, a first on a closing basis.

Friday's gains sent the Dow Jones Industrial Average into positive territory for the year, alongside the S&P 500 and Nasdaq Composite. Trading volume on Wall Street was the lowest this year, according to FactSet.

A report showing a stronger-than-expected rebound in U.S. new-home sales boosted sentiment, and Hewlett-Packard Co. and GameStop Corp. surged after their quarterly earnings reports to lead the S&P 500.

The benchmark (SPX) closed 8.04 points, or 0.4%, higher at 1,900.53, a record level, and gained 1.2% over the week.

The Dow Jones Industrial Average (DJI) gained 63.19 points, or 0.4%, to 16,606.27 and finished the week 0.7% higher. The blue-chip index turned positive for the year.

The Nasdaq Composite (RIXF) ended the day up 31.47 points, or 0.8%, at 4,185.81, clocking in a 2.3% gain over the past five days.

The Russell 2000 index (RUT) of small stocks gained 12 points, or 1.1% to 1,126.18, according to preliminary data from FactSet. The small-cap index gained 2.1% over the week and moved above its 200-day moving average.

In economic news, sales of new single-family homes rose 6.4% to 433,000 last month, led by the South and Midwest, the government reported Friday. Economists polled by MarketWatch had expected an April sales pace of 429,000.

"If the S&P 500 closes above 1,900 it would be very significant, but we still maintain our view that a correction this summer is highly likely," said Uri Landesman, president of Platinum Partners hedge fund.

"Stocks are not discounting bad news that may happen unexpectedly. The 10-year Treasury yields at such low levels is a reflection on the state of other asset classes, people are willing to hold bonds which pay very little," he added.

On the earnings front, GameStop Corp.'s (GME) stock gained 4.2% after the retailer reported gains in profit and revenue late Thursday.

Hewlett-Packard Co.(HPQ) rallied 6.1% after its quarterly report and announcement of more job cuts. (Read more: GameStop, Foot Locker rise; Aéropostale slumps http://www.marketwatch.com/story/gamestop-foot-locker-rise-aeropostale-slumps-2014-05-23.).

Home builder stocks were the main beneficiaries of the upbeat housing data. D.R. Horton, Inc (DHI) rose 4.1%, Lennar Corporation (LEN) gained 4%.

Aeropostale Inc. (ARO) shares plummeted 25%. The teen retailer said late Thursday its first-quarter sales fell 12% to $395.9 million, missing expectations. Same-store sales, including e-commerce, fell 13% in the first quarter and the company forecast a larger-than-expected loss for the second quarter. Aeropostale management cites progress, but investors aren't buying it.

European and Asian stocks are higher

European shares ended a volatile day on an upbeat note on Friday after U.S. housing data spurred a positive mood on both sides of the Atlantic, while a fall in German business confidence prompted investors to assess the chances of action by the European Central Bank. Stocks closed higher across Asia, with the Nikkei Average's rise of 0.9% adding to its 2.1% gain on Thursday.

Gold futures for June delivery (GCM4) slipped, while crude oil for July delivery (CLN4) inched higher. The dollar moved higher against the euro (EURUSD) after the German Ifo business-confidence report missed expectations.

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