The Nasdaq composite index gained about 6.1 per cent for the week after the Fed slashed short-term interest rates for the sixth time this year.
The benchmark Standard & Poor's 500 index was little changed, falling 0.08 percent and the blue-chip Dow Jones industrial average slipped almost 1 percent.
Major indexes finished the quarter higher. The technology-packed Nasdaq rose 17.4 percent, snapping a four-quarter losing streak. The S&P 500 gained 5.5 percent and the Dow average advanced 6.3 percent.
"I think we have the makings of a summer rally." said mR Noah Blackstein, a portfolio manager at Dynamic Power American Fund, which oversees $230 million. "We had the most aggressive rate cuts in a six-month period. You have earnings falling, but not falling any worse. You have the worst two quarters behind us and almost the end of preannouncement season."
A US appeals court added to the upbeat sentiment when the court overturned an order to split software giant Microsoft in two, as investors bet the government would be less likely to pursue antitrust litigation against companies under the administration of Republican President Bush.
Still, the court left intact another ruling that the company broke antitrust laws. Microsoft gained 6 per cent for the week.
In addition, many stock prices already reflect a dismal second-quarter earnings period.
Shares of PMC-Sierra , for one, rose on Friday, even after warning of a wider-than-expected loss. The communications chipmaker has plunged 60 percent this year as demand for its products has declined.