Wall Street’s hot hand cooled off on Friday, but shares still managed to finish higher on the day, the fourth consecutive session on the upside.

Before the markets opened, China’s prime minister said he was “a little worried” about the country’s $1 trillion investment in United States Treasury debt. China is the largest purchaser of American government debt, which is generally considered the world’s safest investment.

At the close, the Dow Jones industrial average was 53.92 points or 0.75 percent higher, at 7,223.98, and the Standard & Poor’s 500-stock index rose 0.77 percent or 5.81 points, at 756.55. The technology-heavy Nasdaq index was a 5.4 points higher at 1,431.50.

Crude oil settled 81 cents lower at $46.22 a barrel.Treasury prices were mixed on Friday morning as investors mulled over the comments from the Chinese prime minister, Wen Jiabao, and wondered whether they presaged a reduced appetite for American debt as the federal government ramps up huge new spending projects.

The Dow and S.& P. 500 posted their strongest gains this week since November, bouncing back from their worst levels in about 12 years.

After enduring months of increasingly bleak headlines about bank solvency and corporate losses, investors seized on a few strands of less-than-awful economic news and alchemized them into hope, breathing life back into depressed financial shares and other niches of the market.

This week, Bank of America, JPMorgan Chase and Citigroup assured investors that they had turned a corner in the first months of 2009 and were operating at a profit. All three big banks have received government aid under the $700 billion financial bailout, and the government has taken a 36 percent stake in Citigroup.

Investors also put a positive spin on new retail sales numbers, which fell less than economists had expected, and said they breathed a sigh of relief after a long-anticipated downgrade of General Electric’s triple-A credit cut the conglomerate’s rating by only one notch.

Investors continued to speculate that regulators were considering changes to mark-to-market accounting rules, which regulate how companies value assets. And they cheered statements that the Securities and Exchange Commission could reinstate a regulation intended to slow the short-selling of stock.

Although investors were pleased with the bounce in the stock indexes, which had fallen some 25 percent since the start of the year, experts cautioned that three days did not make a bull market.

“You will see rallies like this from time to time as we bounce along the bottom of the market,” said Joe Battipaglia of Stifel Nicolaus, discussing Thursday’s gains. “Recent history has had a lot of hopes dashed on big rallies. The question is, What about this time around?”

Indeed, the government offered another reminder on Friday that the American economy was still in a global downturn, reporting that the trade deficit shrank for another month in January as overall trade volumes dwindled.

The Commerce Department said that American imports and exports of all goods and services totaled $285.8 billion in January, down some 20 percent from the same time a year ago.

From As Week Ends, Shares Manage to Stay on Upside

From what I read, the asian market is now switching from bear to bullish mode.
Hope the US market is about to do the same.

Mike

The condition of Asia and US is different and I think US has better Strategy to overcome the situation. Beside on the basis of some industry analysis summery The graph will go upward with in the next two years.

I agree with you.