By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks edged higher on Friday, with indexes headed for a third week of gains, as upbeat corporate earnings and sales gave more credence to a bullish market outlook.
Lifting the Dow, Caterpillar Inc
Recent advances have pushed the major indexes to more than 30-month highs. The S&P 500, up about 4.2 percent so far this month, has doubled in less than two years, the quickest 100 percent jump since the Great Depression.
Volume, though, has been light in the most recent leg of the rally, with just 6.7 billion shares changing hands Thursday on the New York Stock Exchange, NYSE Amex and Nasdaq combined -- the second lowest total so far this year.
Volume was 2.3 billion by late morning on Friday, in line with the recent below-average readings.
"My outlook is cautiously optimistic," said Don Wordell, portfolio manager of RidgeWorth MidCap Value Fund in Orlando, Florida. "Corporate earnings are in great shape. That's good for equities. Balance sheets are in great shape, so you're seeing if companies can't grow organically, they're going out and buying growth, and if they're not doing that, then they're buying stock. That's good for equities."
The Dow Jones industrial average <.DJI> was up 37.05 points, or 0.30 percent, at 12,355.19. The Standard & Poor's 500 Index <.SPX> was up 2.07 points, or 0.15 percent, at 1,342.50. The Nasdaq Composite Index <.IXIC> was up 5.56 points, or 0.20 percent, at 2,837.14.
Wordell expected only slight moves in the market on Friday, though, because of the long holiday weekend ahead. The markets will be close for the U.S. Presidents Day holiday on Monday.
Among earnings reports, Brocade Communications Systems Inc
Overseas, China raised banks' required reserves by 50 basis points on Friday, showing no let-up in the government's campaign to stamp out stubbornly high inflation.
(Additional reporting by Edward Krudy; editing by Jeffrey Benkoe)
