NEW YORK — Stocks gained for a second straight week as company earnings reports started to come in, keeping the Standard and Poor’s 500 index within a fraction of its highest level in five years.
The S&P 500 was little changed Friday, and gained 5 points in the week to close at 1,472.05. The index is slightly below its close of 1,472.12 Thursday, its highest level since December 2007.
The Dow Jones industrial average rose 17.21 points to 13,488.43. The Nasdaq composite index rose 3.88 to 3,125.63. For the week, the Dow rose 53 points and the Nasdaq rose 24.
Rising stocks edged out falling ones on the New York Stock Exchange. Consolidated volume was an average 3.3 billion shares.
Companies have started to report earnings for the fourth quarter of 2012, but no clear pattern has emerged as of yet.
Aluminum company Alcoa gave stocks a lift after it reported earnings late Tuesday that matched analysts’ expectations and said that demand was increasing. Investors were unimpressed by Wells Fargo’s record profits Friday, choosing instead to focus on the sustainability of those earnings.
“You’ve been hearing comments that earnings season is going to show a continued contraction in the rate of growth,” said Robert Pavlik of Banyan Partners. “People are conflicted, they are worried, but at the same time they don’t want to be missing out on the action in the overall market.”
Currently, analysts expect fourth quarter earnings for S&P 500 companies to grow at a rate of 3.3 percent, according to the latest data from S&P Capital IQ. That’s a better growth rate than the previous quarter, but it’s considerably weaker than the 8.4 percent growth rate recorded in the same period last year.
JPMorgan Chase, Goldman Sachs, U.S. Bancorp, Citigroup and Bank of America are among banks and financial companies reporting earnings next week. Financial stocks were the best performing industry group in the S&P 500 last year, gaining 26 percent. Other companies reporting earnings next week include eBay and Intel.
The stock market jumped Thursday on reports suggesting the outlook for economic growth may be improving both in Europe and China.
Stocks are up on the year after lawmakers came up with a last-minute deal to prevent the U.S. from going over the “fiscal cliff.” That averted the threat of a series of tax increases and spending cuts Jan. 1 that some economists say would have pushed the U.S. economy into recession.
Avoiding the cliff will likely have boosted consumer confidence, said Chris Kichurchak, vice president at Strategic Wealth Partners. That improving sentiment, combined with a strengthening housing market, should prove favorable to socalled cyclical companies that move in line with the economy.
“There are a lot of people who were holding out on spending,” before a budget deal was struck, Kichurchak said.
Investors started the year by jumping into stocks, according to Bank of America Merrill Lynch research. Just more than $22 billion was invested in equities in the first full week of this year, the second-highest weekly in-flow on record after the $22.8 billion invested in September 2007.
American Express shares rose 45 cents, or 0.7 percent, to $61.24 after the company said that spending by cardholders jumped 8 percent in the fourth quarter.
Ford Motor Co. shares rose 17 cents, or 1.2 percent, to $14. The company said demand for new vehicles is accelerating in the U.S. Ford plans to hire 2,200 engineers, computer programmers and other white-collar workers this year.
Corning shares fell 19 cents, or 1.5 percent, to $12.45 after Goldman Sachs cut its rating on the specialty glass manufacturer to “neutral” from “buy,” saying that it expected first quarter sales to decline more than previously expected.
Business, Pages 28 on 01/12/2013