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The Dow Jones and the S&P 500 climbed to their highest levels since December 2007 Friday. By the close of trade on Friday the Dow had rallied 54 points to 13,650, with the S&P adding five points to 1486 - while the NASDAQ eased one point to 3135.
During trade investors weighed disappointment from the U.S. consumer sentiment index and Intel (NASDAQ:INTC) results against news that the House of Representatives will vote next week on an increase in the U.S. debt ceiling, along with positive results from GE.
House Majority Leader Eric Cantor said Friday that the House will vote to authorize a three-month increase in the debt ceiling, to give Congress time to pass a budget. Though the news provided some optimism to markets, the extension of the debt limit still doesn't provide a long-term solution to the U.S. deficit.
Markets were down earlier as the University of Michigan-Thomson Reuters reported its preliminary reading on consumer sentiment fell to 71.3 in January from 72.9 in December. The gauge was expected to rise to a level of 75.5.
This was taken in against better-than-expected data from China, that showed the world's second largest economy is picking up steam. Overnight, data showed that China’s economy grew 7.9% in the fourth quarter compared with a year earlier, topping economists’ forecasts.
U.S. Corporate News
On the corporate front, last night, Intel (NASDAQ:INTC) reported a quarterly profit of $0.48 per share, three cents above estimates, despite dropping sharply from a year before. Shares of the chipmaker were down almost 7% today, as it projected a bigger-than-expected increase in capital spending for this year, and issued a disappointing forecast for the first quarter.
Intel said it would invest about $13 billion in equipment this year, as its core PC business continues to weaken.
General Electric (NYSE:GE) provided some respite, however, after it said this morning fourth quarter profit rose 8%, with earnings from continuing operations reaching 41 cents per share, from 37 cents a year earlier. Operating earnings for the latest quarter came in at 44 cents a share, topping the 43 cents per share analysts expected. Revenue also beat views, rising 4% to more than $39.3 billion. Shares gained 3.8%.
Morgan Stanely (NYSE:MS) shares jumped more than 7% after posting earnings from continuing operations of 28 cents a share in the latest quarter, a penny above estimates. Revenue rose 23% to $6.97 billion.
State Street (NYSE:STT) shares also rose more than 5% after it said adjusted earnings for the fourth quarter were $1.11 a share, up from 99 cents a year earlier, topping analyst views that called for a profit of $1.01 per share. Revenue rose 6% to $2.45 billion.
Capital One Financial (NYSE:COF), meanwhile, shed almost 8% after the credit-card lender’s fourth-quarter results missed expectations.
American Express (NYSE:AXP) shares were also down around 2%, a day after it said it earned $1.09 per share for the fourth quarter, in line with estimates, with revenues also matching estimates. Amex's earnings were down 47 percent from a year earlier, however, due mainly to hefty restructuring charges.
Meanwhile, oilfield services giant Schlumberger (NYSE:SLB) said net earnings fell as revenue rose to $11.17 billion from $10.3 billion. But earnings from continuing operations of $1.08 matched Street views, while revenue beat forecasts of $10.81 billion. The company, whose shares rose over 4%, also increased its quarterly dividend by 13.6 percent to 31-1/4 cents per share.
Aside from earnings, Apple (NASDAQ:AAPL) shares were down again, as Reuters reported that Japan's Sharp has halted almost all production of the 9.7 inch screens for the iPad, as demand shifts to the smaller iPad mini.
Analysts at Goldman Sachs also said that investors are overlooking the company's potential in emerging markets, and affirmed Apple's buy rating with a 12-month price target of $760 a share. Its stock has lost around 4% so far this week and was lately trading around the $499 level.
AT&T (NYSE:T) shares edged up after it said it expects a non-cash fourth quarter charge of about $10 billion due to bigger than expected pension obligations. It also said its fourth quarter results will be impacted by higher than expected smartphone-related costs, and damage from Superstorm Sandy.
Gains were seen in Research In Motion (TSE:RIM) (NASDAQ:RIMM), after Jefferies & Co upgraded the stock to a buy rating ahead of the critical BlackBerry 10 launch at the end of January.
Netflix (NASDAQ:NFLX) also received an upgrade from Janney Capital, which gave the online streaming business a buy rating, citing several factors ahead of the company's fourth quarter report next week. Shares in the company rose over 1.5%.
Gold futures settled lower Friday as the dollar picked up strength, with investors weighing data from both the U.S. and China for gold demand prospects.
Gold for February delivery fell $3.80, or 0.2%, to settle at $1,687 an ounce on the Comex division of the New York Mercantile Exchange. The contract was 1.6% higher for the week, however.
Oil futures settled just slightly higher on Friday, as the International Energy Agency raised its global oil demand forecast for this year, amid strength from the China data. But the U.S. consumer sentiment index weighed. February crude oil rose 7 cents, or 0.1%, to settle at $95.56 a barrel on the New York Mercantile Exchange. The commodity finished 2.1% higher for the week.
European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.36%, while the DAX led the CAC 40 lower. They fell 0.43% and 0.07%, respectively.