Wall Street finally got the news it was expecting when the Fed left interest rates unchanged and issued its usual warnings. Next week's holiday-shortened session will likely bring more seesaw-like trading.
For the week, the Dow Jones industrial average closed up 43 points to 10,447.89 while the Nasdaq composite added 121 points to close at 3,966.12.
The biggest news of the week wasn't really news at all.
The Fed, while warning that additional inflationary signs would result in higher rates later this year, left well enough lone, opting not to raise rates for the seventh time in the past two years.
Wall Street reacted by pushing technology stocks higher despite some minor profit warnings and the Justice Department's lawsuit to block the $120 billion merger between Sprint (NYSE: FON) and WorldCom (Nasdaq: WCOM).
Wall Street will pay close attention to each and every economic report between now and the Fed's next scheduled meeting in August.
"It is about what everybody had anticipated," said Bill Meehan, chief market analyst at Cantor Fitzgerald. "I wouldn't be surprised after we get this little bit of a pop that we pull back a little. We had a big strong move into the announcement. (The warning) means people are going to start to worry about what the Fed is going to do in August."
On Friday, the Commerce Department said incomes rose a stronger than expected 0.4 percent, while spending rose 0.2 percent in line with expectations. Price pressures were well contained.
"The figures were not far from expectations and they underpin the view that the economy has slowed," said Sherry Cooper, chief economist at Nesbitt Burns, in a research report.
Priceline.com (Nasdaq: PCLN) came under fire this week on reports that six major airlines are investing in their own Web site, called Hotwire.com, to offer discounted airfare to online travelers.
Based in San Francisco, Hotwire.com has 50 employees and $75 million in initial financing led by majority investor Texas Pacific Group. Several airlines, including US Airways, Continental Airlines and America West Airlines hold minority stakes in the start-up.
However, most analysts dismissed the alleged competition, saying Priceline's diversification and brand recognition would allow it to weather the storm.
A couple of network-equipment makers posted quarterly results this week.
Cabletron Systems (NYSE: CS) topped Street estimates when it lost $3.7 million, or 2 cents a share, on sales of $275.1 million.
It also outlined plans to take two of its four business units public later this year.
3Com (Nasdaq: COMS) also beat Street estimates this quarter, but it lost $146.8 million, or 42 cents a share, on sales of $763.7 million.
Unfortunately, there are no significant technology earnings reports to look forward to next year.