Week Ahead: Stocks Look Set to Ride Higher Into New Year's

By: Patti Domm CNBC Executive Editor

Odds are good that stocks will ride out the final week of the year on an upswing that could continue into early January.The market closed out the past week at the year's highs, and traders say the market has been setting up to move even higher in the coming week. There is little economic news to affect trading, but a big event will be the auction of some $118 billion in Treasury notes. Investors will also be watching for the latest tally on retailers' holiday sales.

Traders are anticipating a Santa Claus rally, which occurs when stocks rise in the final five sessions of the year and the first two of the new year. That trend has worked 77 percent of the time for the Dow since 1896, and the average gain in those up years has been 2.8 percent.The Dow finished the past week with a 1.9 percent gain at 10,520, which puts it up nearly 20 percent for the year. The S&P rose 2.2 percent to 1126 and is now up 24 percent for the year. The Nasdaq gained 3.4 percent for the week to 2285, and is up 45 percent for the year.

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