NEW YORK — The stock market’s rally is on hold, and it’s not clear what might restart it.
Stock indicators barely budged last week after the previous week’s big gains. The Dow Jones industrial average did manage to push into the black for the year with a modest gain Friday, but many traders remain cautious.
The continuing crop of better-than-expected economic news has lost its ability to incite the kinds of big gains the market was enjoying in March, early in a three-month rally that has brought the Standard & Poor’s index up 39.9 percent.
Those kinds of gains might normally take years to occur, so it’s understandable that traders would become wary about hitting the “buy” button. Also, the market’s enthusiasm about the economy has been checked recently by unease about rising interest rates and inflation.
Joe Clark, managing partner of Financial Enhancement Group, said investors have for now absorbed all the good news possible to push stocks higher.
“The sponge seems to be full,” he said.
The bond market exercised unusual control over stocks during the week as investors worried that the Treasury Department was running low on buyers for U.S. debt. While a successful bond auction Thursday eased some of those concerns, investors are still nervous that Washington might have to entice buyers with higher interest rates.
Besides determining the government’s own borrowing costs, bond yields are also used as a benchmark for consumer loans. The 10-year Treasury note, which is closely tied to home mortgage rates, has risen to 3.80 from 3.71 percent in little more than a week.
Rising interest rates are worrisome because they could hamper the economy’s attempts to recover from the recession, which began in December 2007.
With little to point them in either direction, stocks zigzagged in a tight range Friday as commodity and technology stocks gave up some of their recent gains.
The Dow Jones industrial average rose 28.34, or 0.3 percent, to 8,799.26. It was the Dow’s highest close since Jan. 6.
The broader S&P 500 index rose 1.32, or 0.1 percent, to 946.21, and the Nasdaq composite index fell 3.57, or 0.2 percent, to 1,858.80.
For the week, the Dow edged up 0.4 percent, the S&P 500 index rose 0.7 percent and the Nasdaq added 0.5 percent. The indexes are all positive for the year.
Analysts said the market’s pause was a healthful sign after the recent gains.
“We ran at sprinters’ speed, and now we’re taking a couple jogs around the track to see if we can sprint again,” said David Darst, chief investment strategist at Morgan Stanley Smith Barney.
There have been 26 bull markets — defined as a rise of more than 20 percent — since 1928. They have lasted an average 326 calendar days, compared with the 85 days for the current surge, Darst noted.
