Stocks rose modestly on Friday after data showing consumer sentiment rose in October to its highest in five years and inflation pressure remained in check last month.
The positive economic data overshadowed a decline in shares of the banking sector.
The Thomson Reuters/University of Michigan's preliminary October reading on consumer sentiment rose to 83.1, well above the 78 forecast for the index as optimism about the economy improved.
A separate report showed producer prices rose a steeper-than-expected 1.1 percent in September, but excluding volatile food and energy costs, the Labor Department's Producer Price Index was flat compared with August, indicating underlying inflation pressures remained muted.
The data helped offset a drop in bank shares after earnings from JPMorgan Chase & Co and Wells Fargo & Co .
JP Morgan, the largest U.S. bank, edged up 0.6 percent to $42.37 after paring earlier gains. Wells Fargo, the biggest U.S. home lender, dropped 2.5 percent to $34.40. The KBW Bank index <.BKX> lost 1.2 percent.
Both banks benefitted significantly from a home loan refinancing boom, but investors were disappointed revenue from Wells Fargo came in shy of expectations.
The banks' earnings were expected to the primary factor for Friday's market, but they were unexciting and yet stocks were higher, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
"Probably (it's) the Michigan consumer sentiment. That was a better-than-expected number. You had the unemployment claims yesterday. You are starting to see some better economic data percolate through," he said.
Massocca also cited the Federal Reserve's monetary policy as a big driver as it is providing so much liquidity it makes "the line of least resistance for all securities markets" upward.
The benchmark S&P index is down 1.7 percent so far this week, putting it on track for its worst weekly performance since a 3 percent drop in the week through June 3.
Weak global demand has heightened investor worry over corporate earnings. As a group, S&P 500 companies' quarterly earnings are expected to fall 3 percent from a year ago, according to Thomson Reuters data, marking the first decline in three years.
The Dow Jones industrial average <.DJI> gained 37.16 points, or 0.28 percent, to 13,363.55. The Standard & Poor's 500 Index <.SPX> rose 0.81 point, or 0.06 percent, to 1,433.65. The Nasdaq Composite Index <.IXIC> added 3.79 points, or 0.12 percent, to 3,053.20.
Advanced Micro Devices Inc dropped 9.4 percent to $2.90 after the chipmaker said its third-quarter revenue likely fell 10 percent from the previous quarter as a weak global economy and a growing preference for tablets slams the PC industry.
U.S.-listed shares of STMicroelectronics jumped 9 percent to $6.15 after Bloomberg reported Europe's top semiconductor maker was considering a breakup that could lead to the sale of its struggling mobile-phone chip business.
J.B. Hunt Transport Services jumped 7.1 percent to $58.68 after posting quarterly earnings, lifting the Dow Jones Transportation average <.DJT> to 1.2 percent. Many analysts had recently noted the divergence between the transports and the industrials as troubling sign for the markets.
(Editing by Kenneth Barry)