Earnings lift Wall Street; S&P 500 advances for eighth day
By Chuck Mikolajczak | January 26, 2013 4:49 AM EST
U.S. stocks rose on Friday as strong Procter & Gamble Co's earnings trumped weak housing numbers and helped carry the Standard & Poor's 500 index higher toward its longest winning streak in more than eight years.
Procter & Gamble
But the stock market's gains were curbed after economic data showed new U.S. single-family home sales fell in December, although expectations for a continued housing sector recovery remain intact. The PHLX housing sector index <.HGX> edged up 0.15 percent.
Apple Inc dropped 2.1 percent to $441.24. The stock of the iPhone maker has dropped more than 17 percent since the start of the year on growth concerns. Friday's decline knocked the tech giant from its perch as the most valuable U.S. company, making it No. 2 after ExxonMobil Corp
Helping to lift the Nasdaq index, Starbucks Corp
The benchmark S&P 500 index is up 5.2 percent so far in January. The equity market's strong start this year has been attributed to solid corporate results, an agreement in Washington to extend the government's borrowing power, encouraging signs from the global economy and seasonal inflows into stocks.
Those factors helped the S&P 500 rally for a seventh day on Thursday to reach a five-year peak. But the index has struggled to convincingly climb above 1,500, a level it surpassed briefly on Thursday for the first time since December 2007.
"It looks like we are encountering a little short-term resistance. The market always likes whole numbers and 1,500 seems like as good as any," said Doug Foreman, co-chief investment officer at Kayne Anderson Rudnick Investment Management in Los Angeles.
"The earnings are coming in pretty good overall. Expectations had been pretty low for the quarter given the 'fiscal cliff' concerns, etc., so some of the stocks are acting pretty well even with numbers that are a little bit better than people had feared."
If the S&P 500 rises for an eighth day on Friday, it will be its longest winning streak since late 2004, when it rallied for nine straight days.
The Dow Jones industrial average <.DJI> gained 55.58 points, or 0.40 percent, to 13,880.91. The Standard & Poor's 500 Index <.SPX> climbed 5.81 points, or 0.39 percent, to 1,500.63. The Nasdaq Composite Index <.IXIC> rose 14.49 points, or 0.46 percent, to 3,144.88.
Honeywell International Inc
The initial portion of earnings season has been encouraging relative to recent expectations. Overall, S&P 500 fourth-quarter earnings growth is on track for a 2.9 percent rise, up from the forecast of a 1.9 percent gain at the start of the earnings season but well below the 9.9 percent increase in an October 1 forecast.
Thomson Reuters data through Friday showed that of the 147 S&P 500 companies that have reported earnings, 68 percent exceeded expectations. Since 1994, 62 percent of companies have topped expectations, while the average over the past four quarters stands at 65 percent.
(Editing by Jan Paschal and Kenneth Barry)