Stock gains lift Dow Jones, S&P 500 to 5-year highs

NEW YORK Stocks closed higher on Wall Street, ending a third straight week of gains. The Dow Jones industrial average and the Standard & Poor's 500 index closed on Friday at their best levels since December 2007.

General Electric led the Dow higher after reporting a strong quarter thanks to growth in emerging markets. The S&P 500 rose five points to close at 1,486. The Nasdaq gave up a point to end at 3,134, dragged down by a loss at Intel.

• Should you be active in emerging markets?
• Treasury moves to sell government stake in GM
• Asia stocks rise as U.S., China economies improve

Rising stocks outnumbered falling ones two to one on the New York Stock Exchange. Volume was in line with the recent average at 3.7 billion shares.

Even though investors had plenty of news to digest, trading was largely quiet. "Earnings always matter," said Rex Macey, chief investment officer of Wilmington Trust Investment Advisors in Atlanta. "But just because we're in the middle of earnings season doesn't mean we're going to get huge market moves."

Morgan Stanley's earnings surged across its many business lines, as more companies hired the investment bank to help it raise money and line up mergers. Morgan Stanley gained nearly 8 percent, rising $1.63 to $22.38.

Capital One Financial lost 7.5 percent after reporting revenue and earnings that fell short of analysts' estimates.

Intel, the world's biggest chipmaker, said late Thursday that fourth-quarter net income fell 27 percent. A growing preference for smartphones and tablets, instead of personal computers and laptops powered by Intel chips, have made investors wary of the company's stock. It fell 6.3 percent to $21.25.

Five companies raised a total of $1.8 billion through initial public offerings this week, making it the best week for IPOs since early October, according to the data provider Ipreo.

American Express fell $1.6 percent to $59.58. Hefty charges tied to the credit card issuer's plan to cut jobs and reorganize some business lines hurt results, and revenue fell short of estimates.

Analysts forecast that companies in the S&P 500 will report a 4 percent increase in fourth-quarter earnings over the same period the year before, according to a report out Friday from S&P Capital IQ. They say banks and other financial firms should have the strongest profit growth of any industry. Technology companies like Intel are expected to struggle.