By Caroline Valetkevitch
NEW YORK (Reuters) - The Dow ended at a record high on Friday, boosted by IBM, while a rebound in high-growth momentum names helped the broader market.
Consumer discretionary shares also lifted the market, with the stock of Gap Inc (GPS.N) up 3.3 percent at $40.52 after the apparel retailer reported upbeat April sales and gave a profit forecast that surpassed Wall Street's expectations. The S&P consumer discretionary index (.SPLRCD) was up 0.6 percent.
Apple Inc (AAPL) was the biggest drag on both the benchmark S&P 500 index and the Nasdaq 100 (.NDX) on news that it is close to paying a record $3.2 billion for Beats Electronics, an expensive foray into music streaming and headphone gear, two people with knowledge of the matter said.
Some analysts questioned whether Beats, valued at $1 billion during its last funding round in September, was worth that price. Apple shares fell 0.4 percent to $585.54.
Momentum names advanced, with shares of Gilead Sciences Inc (GILD.O) up 1.3 percent at $79.76. Netflix Inc (NFLX.O) shares rose 2.1 percent to $328.55 after the company increased the price of its most popular video streaming plan by $1 a month.
The gains came after a volatile week for those shares. The S&P 500 has alternated between gains and losses each day this week, and the Nasdaq has dropped for three straight sessions - its longest losing streak since early April - as Internet-related stocks came under pressure.
Trading was mostly lackluster, with about 5.7 billion shares changing hands on the U.S. exchanges, below the 6.2 billion month-to-date average, according to data from BATS Global Markets.
"The volatility and the decline in a lot of growth stuff is wearing people out," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "There's a lot of trader fatigue."
The Dow Jones industrial average (^DJI) rose 32.37 points or 0.2 percent, to 16,583.34, the S&P 500 (^GSPC) gained 2.85 points or 0.15 percent, to 1,878.48 and the Nasdaq Composite (^IXIC) added 20.374 points or 0.5 percent, to 4,071.869.
Shares of International Business Machines Corp (IBM) rose 0.6 percent to $190.08 and helped lift the Dow to a record close.
For the week, the Dow rose 0.4 percent, while the S&P 500 dipped 0.1 percent and the Nasdaq fell 1.3 percent. This marked the Nasdaq's biggest weekly percentage decline in a month.
The Russell 2000 (NYF:^OTY00) gained 0.9 percent. Early in the session, it flirted with correction territory, defined as a 10 percent drop from a recent peak. At its session low, the Russell touched 1,091.50, nearly 10 percent below its all-time closing high of 1,208.65 reached on March 4.
Healthcare stocks rose, with shares of Merck (MRK) up 0.7 percent at $55.21 a day after U.S. health regulators approved a blood-clot prevention drug developed by Merck for use by patients who have had a heart attack or who suffer from blockages in the arteries of the legs. The S&P healthcare index (.SPXHC) was up 0.6 percent.
Among the day's big decliners, Rocket Fuel Inc (FUEL) shares tumbled 21.5 percent to $21.83 after the technology provider for Web-based video advertising forecast current-quarter revenue far below expectations, prompting downgrades from Goldman Sachs and BMO Capital.
Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 17 to 13, while on the Nasdaq, nearly 17 stocks rose for every nine that fell.
(Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)