By Rick Glaze

The Nasdaq index peaked at a four-year high on Friday ending a seven-week upward sprint. Chipmakers helped propel the average as the Philadelphia Semiconductor index rose more than 4 percent to its highest level in 1 1⁄2 years. The Town Crier Index is up more than 25 percent this year. Although not exclusively a “tech” index, it is made up of local companies and naturally would be heavy with technology stocks.

The S&P 500, a more diversified index, was down 0.3 percent for the week, while the small company S&P 600 posted a modest gain of 0.9 percent. There were positive signs in the overall market with 403 new highs versus 67 new lows on Friday.

Slower sales for existing homes dampened spirits early in the week but new home sales, better than expected Gross Domestic Product growth and rising consumer confidence later in the week fueled steady buying.

Consumer confidence is an important gauge for stock investors. It is considered a “sentiment” number, rather than a hard-and-fast measure. Sentiment indicators reflect the psychology of the market.

Consumer confidence measures how buyers are feeling about new purchases. Consumers consider job stability, income growth, mortgage levels and more in their decisions. As you have already learned from this column, consumer spending is two-thirds of the economy so the attitude of the buyer is very important. Contrarily, hard numbers like sales, inventories, manufacturing capacity and earnings are used in “fundamental” research.

President Bush was crowing about the economy last week, as well he should. The country added 215,000 jobs last month, the biggest increase since July.

Rick Glaze is the president of Glaze Capital Management Inc. of Los Altos and a registered representative offering securities through First Allied Securities Inc.