The Nasdaq outperformed the broader market as Apple shares reached an all-time high. The CBOE VIX volatility index <.VIX> hit a 5-year low of 13.43 before closing down 5.9 percent at 13.45.

The S&P 500 made a solid move above the closely watched 1,400 level in the last session, posting its biggest gain in two weeks. But trading volume remained low.

"From a sentiment point of view, the market has little to inhibit it from proceeding higher," said Ralph Edwards, director of derivatives strategy at ITG in New York.

"The best rallies are, of course, the broadest, so it makes sense to view, in real-time, the stocks that are propelling the index so as to make sure that the advance is not just being carried on the shoulders of one sector. Here, the news is also good."

Edwards noted that 47 S&P 500 stocks in all industry groups except for utilities have recently hit a 52-week high, among them Home Depot Inc (>> The Home Depot, Inc.), PepsiCo Inc (>> PepsiCo, Inc.), Chevron Corp (>> Chevron Corporation), SunTrust Banks Inc (>> SunTrust Banks, Inc.), Covidien Plc (>> Covidien plc), 3M Co (>> 3M Co), Google Inc (>> Google Inc), CF Industries Holdings (>> CF Industries Holdings, Inc.) and Sprint Nextel Corp (>> Sprint Nextel Corporation).

With few news headlines and light participation during summer holidays, traders are increasingly taking their cues from market technicals. The S&P 500 needs to close above 1,419.04, the index's April high, to make a new four-year high.

Shares in Apple Inc (>> Apple Inc.) jumped to an all-time intraday high of $648.19 earlier in the session. The stock ended up 1.8 percent at $648.11. The Broker Jefferies raised its price target on the stock to $900 from $800 and gave it a 'buy' rating.

But Facebook shares continued to slide after the expiration of a lockup period on some of the company's stock following its initial public offering. The shares fell as low as $19 a share on Friday.

Groupon Inc (>> Groupon Inc) also slumped to a new low on Friday after Evercore Partners analyst Ken Sena downgraded shares of the largest daily deal company and set a $3 price target on the stock. The stock closed down 5 percent at $4.75, after falling as low as $4.51.

The Dow Jones industrial average <.DJI> was up 25.09 points, or 0.19 percent, at 13,275.20. The Standard & Poor's 500 Index <.SPX> was up 2.65 points, or 0.19 percent, at 1,418.16. The Nasdaq Composite Index <.IXIC> was up 14.20 points, or 0.46 percent, at 3,076.59.

For the week, the Dow was up 0.5 percent, the S&P 500 was up 0.9 percent and the Nasdaq was up 1.8 percent.

The S&P 500 has risen 2.8 percent in August and about 11 percent since a year low in June as traders eye some encouraging U.S. jobs data and highly anticipated policy meetings at the European Central Bank and the Federal Reserve in September.

The economic data on Wednesday was mixed, leaving investors wondering if the recovery was real.

The Thomson Reuters/University of Michigan consumer sentiment survey for August showed the main index rose to its highest since May to 73.6, buoyed by sales at retailers and low mortgage rates.

Separately, the Conference Board said its leading economic index climbed 0.4 percent, reversing a 0.4 percent decline in June and pointing to slow growth through the end of 2012.

"It's interesting because we've had this mixed bag from the economic data. Today's is a good step and yesterday was a little disappointing, with the housing data, so we are all just kind of wondering, is this recovery real?" said Ryan Detrick, senior technical strategist, Schaeffer's Investment Research in Cincinnati, Ohio.

Trading volume, which has been meager over the past several sessions during a seasonally slow period, was at 5.3 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq.

This week has seen the lowest and second lowest full-day trading volumes of the year.

The low was hit on Monday with just 4.54 billion shares on the Nasdaq, the NYSE and the Amex, about two thirds of the daily average this year.

The S&P rallied for six days through August 10, boosted by the anticipation of more actions from central banks in the United States and euro zone.

The S&P 500 rose to a four-month peak on Thursday after comments from German Chancellor Angela Merkel reinforced investor expectations for action to tackle the euro zone debt crisis.

Gap (>> The Gap Inc.) advanced 4.8 percent to $35.99 after the clothing retailer posted a higher quarterly profit and raised its full-year forecast.

Marvell Technology Group Ltd (>> Marvell Technology Group Ltd.) dropped 14.1 percent to $10.54 after the chipmaker posted second-quarter earnings and said current-quarter results may miss expectations.

(Reporting by Angela Moon; Editing by Chizu Nomiyama)

By Angela Moon