Markets rally as volatility hits five-year low

NEW YORK — The Standard & Poor’s 500-stock index held near a four-year high on Friday, and the markets’ key gauge of anxiety sank to its lowest since 2007, suggesting a belief that the problems stressing investors might be closer to a resolution.

The Nasdaq Stock Market outperformed the broader market as Apple shares reached an all-time high. The CBOE VIX volatility index hit a five-year low of 13.43 before closing down 5.9 percent at 13.45.

The S&P 500 made a solid move above the closely watched 1,400 level in the last session, posting its biggest gain in two weeks. But trading volume remained low.

“The best rallies are, of course, the broadest,” said Ralph Edwards, director of derivatives strategy at ITG in New York, “so it makes sense to view, in real time, the stocks that are propelling the index so as to make sure that the advance is not just being carried on the shoulders of one sector. Here, the news is also good.”

Edwards noted that 47 S&P 500 stocks in all industry groups except for utilities have recently hit 52-week highs, among them Home Depot, PepsiCo, Chevron, SunTrust Banks, Covidien, 3M, Google, CF Industries and Sprint Nextel.

Shares in Apple jumped to an all-time intraday high of $648.19 earlier in the session. The stock ended up 1.9 percent at $648.11. The broker Jefferies raised its price target on the stock to $900 from $800 and gave it a “buy” rating.

But Facebook shares continued to slide after the expiration of a lockup period on some of the company’s stock following its initial public offering. The price fell as low as $19 a share on Friday.

Groupon also slumped to a new low on Friday after Evercore Partners analyst Ken Sena downgraded shares of the largest daily deal company and set a $3 price target on the stock. The stock closed down 5 percent at $4.75, after falling as low as $4.51.

The Dow Jones industrial average was up 25.09 points, or 0.19 percent, at 13,275.20. The S&P 500 was up 2.65 points, or 0.19 percent, at 1,418.16. The Nasdaq composite index was up 14.20 points, or 0.46 percent, at 3,076.59.

For the week, the Dow was up 0.5 percent, the S&P 500 climged 0.9 percent, and the Nasdaq rose 1.8 percent.

The S&P 500 has risen 2.8 percent in August and about 11 percent since a year low in June. It needs to close above 1,419.04, the index’s April high, to make a new four-year high.

Trading volume, which has been meager over the past several sessions during a seasonally slow period, was at 5.3 billion shares on the New York Stock Exchange, the American Stock Exchange and the Nasdaq.

This week has seen the lowest and second-lowest full-day trading volumes of the year. The low was hit on Monday with just 4.54 billion shares on the Nasdaq, the NYSE and the Amex, about two thirds of the daily average this year.

— Reuters