Stocks advanced on Friday after the Group of Seven intervened to support the Japanese yen and major banks were cleared to pay dividends again, but investors are unlikely to make big bets heading into the weekend.
Stocks came off highs as caution picked up ahead of a long weekend in Japan where markets are closed for a holiday Monday. The unresolved nuclear crisis in Japan and the revolt in Libya have kept investors on edge this week, though markets have recovered in the last two days.
I don't think this is the kind of market where people want to leave positions open with the weekend coming up, said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates on Toronto.
Bank shares jumped as the Federal Reserve announced it will allow some of the largest U.S. banks to boost or restart dividend payments this year but will restrict the amounts to 30 percent or less of the company's anticipated earnings.
Wells Fargo and Co
The Bank of Japan bought billions of dollars to restrain a soaring yen and was followed by U.S. and European central bank purchases.
The iShares MSCI Japan Index Fund
Brent crude was down 1.2 percent to $113.41 a barrel in volatile trading after Libya announced a ceasefire and agreed to halt military action against rebels after a U.N. resolution.
The Dow Jones industrial average <.DJI> was up 103.98 points, or 0.88 percent, at 11,878.57. The Standard & Poor's 500 Index <.SPX> was up 8.65 points, or 0.68 percent, at 1,282.37. The Nasdaq Composite Index <.IXIC> was up 14.72 points, or 0.56 percent, at 2,650.77.
Friday also marks the quarterly expiration and settlement of March equity options and futures, which could add more caution to the market.
The Standard & Poor's 100 index <.OEX> has more expiring in-the-money put open interest than call open interest, so there could be a slight negative bias to option expiration, according to Larry McMillan, president of McMillan Analysis Corp in a report.
The yen fell broadly, with the dollar gaining about 2.4 percent against the currency.
The yen's sharp rise in the aftermath of the crisis threatened to aggravate Japan's economic woes by stalling exports from the world's third largest economy.
(Reporting by Caroline Valetkevitch, additional reporting by Edward Krudy and Doris Frankel; Editing by Kenneth Barry)