The S&P 500 closed up 9 points to 896, the Dow Jones industrial average was up 102 points to 8829 and the Nasdaq gained 3 points to 1536.

It was the first time since 2007 that U.S. stocks have closed higher for five consecutive trading days. The S&P 500 gained 12% on the week with the Dow Jones industrial average and Nasdaq gaining 9.9% and 10.8%, respectively.

"Whether or not the momentum can be sustained into December will depend on psychology -- specifically whether investors believe markets have priced in enough carnage on the economic front and whether they can put the blinders on and persevere through what is going to be an absolutely ugly week for U.S. data," said Andrew Pyle, wealth adviser at Scotia Capital.

Major economic data in the coming week include the U.S. ISM manufacturing and service sector surveys and the employment reports from Canada and the United States. Central bank decisions will also be rendered by the European Central Bank, the Bank of England and Reserve Bank of Australia.

In Canadian equity trading, the S&P/TSX composite index surged in the final minutes of trading and closed at session highs. Led by financials, the index gained 359 points, or 4.1%, to close at 9113. On the week, the index gained 11.7% but still fell 6.7% in the month of November.

Canadian market watchers will spend the weekend eagerly awaiting the resolution of the drama playing out on Parliament Hill. Opposition parties are threatening to topple the minority government on Monday, just six-weeks after the federal election.

The Canadian dollar fell 0.0031 to 0.8092 against the U.S. dollar (1.2359 USD/CAD) on Friday. Shane Enright, currency strategist at CIBC World Markets, said the loonie has been relatively immune to politics and is instead reacting to global growth prospects.

"We've gone through a couple of minority governments and elections and there has been very little reaction from the currency," Enright said.

Enright believes the Canadian dollar will weaken as stocks resume their fall and normal liquidity returns to markets. He said stocks will need to continue rallying into mid-week and oil will need to rebound to at least $58 to underpin the loonie.

"Next week will be an interesting week," he said. "We don't see a lot of short-term relief in terms of economic data."

Elsewhere in foreign exchange, the U.S. dollar was climbing on Friday. It was up 0.31 to 95.51 against the yen and the Dollar Index was up 0.992 to 86.517.

The euro was down 0.0210 to 1.2694 against the U.S. dollar, down 0.0204 to 1.5689 against the Canadian dollar, down 0.0128 to 0.8249 against the pound sterling and was lower by 1.65 to 121.23 against the yen.

The pound sterling was down 0.0017 to 1.5390 against the U.S. dollar and up 0.0043 to 1.9017 against the Canadian dollar.

In fixed income, the U.S. 10-year yield closed at its lowest level in at least 50-years as investors seek to ride out volatility in the security of government debt. In the month of November, 10-year yields fell a full percentage point.

U.S. two-year yields were down 11.1 bps to 0.98%, with five-year yields down 9.9 bps to 1.91%, 10-year yields down 5.8 bps to 2.92% and 30-year yields down 8.6 bps to 3.44%. The Eurodollar March 09 contract was down 4.5 ticks to 98.08. The yield curve was steeper, with the 10/2-year spread up 5.3 bps to 193.70 bps.

Yields on two-year Canadian government bonds were down 2.0 bps to 1.70%, with five-year yields down 3.0 bps to 2.44%, 10-year yields down 2.6 bps to 3.32% and 30-year yields down 2.7 bps to 3.90%. The December 08 BAX contract was up 1.0 tick to 98.13.

In Germany, returns on two-year German bonds were down 4.2 bps to 2.19%, with five-year yields down 3.1 bps to 2.65%, 10-year yields down 3.7 bps to 3.26% and 30-year yields down 5.5 bps to 3.72%.

Yields on UK two-year bonds were down 14.4 bps to 2.21%, with five-year yields down 6.7 bps to 3.20%, 10-year yields down 1.6 bps to 3.77% and 30-year yields up 7.8 bps to 4.12%.

All data taken at 4:16 p.m. EST.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it

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