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Stocks Mixed, But S&P 500 Hits Five-Year High

NEW YORK ( TheStreet) -- Major U.S. stock averages were mixed Friday as the benchmark S&P 500 Index worked its way up to a five-year high.

The S&P 500 climbed 5 points, or 0.3%, to 1,486, bringing its gain to 0.95% this week. Surprisingly bleak U.S. consumer confidence and a lagging technology sector weighed on the markets. Still, the S&P 500 is at its highest close since Dec. 26, 2007.

The Dow Jones Industrial Average closed up 54 points, or 0.4%, to 13,650. The blue-chip index gained 1.2% for the week and finished up six of the past seven days.

Breadth was slightly positive with losers outnumbering winners 21 to nine on the Dow. The most prominent blue-chip percentage decliners were Intel (INTC), American Express (AXP), Bank of America (BAC), Pfizer (PFE), Hewlett-Packard (HPQ) and Boeing (BA).

American Express posted a 47% decline in fourth-quarter net income, as the credit card issuer incurred charges related to restructuring costs and other expenses. Adjusted earnings of $1.09 a share topped Wall Street estimates. Shares were off 1.6%.

Boeing shares slid 0.31% on ongoing concerns about the safety of the 787 Dreamliner aircraft.

General Electric (GE) was a blue-chip winner after the industrial giant reported good fourth-quarter results. Caterpillar (CAT) and DuPont (DD) shares also traded higher. AT&T (T) added 0.63%.

AT&T said Thursday it would record a $10 billion fourth-quarter charge related to its pension and benefit plans. After trading in the red for much of the morning, the shares recovered some, but fell again in the afternoon session.

The Nasdaq lost 1 point to 3,135. The tech-heavy index rose 0.29% for the week.

Most sectors in the broad market rose. Conglomerates marched higher as General Electric, the largest U.S. conglomerate, advanced. Utilities and energy were also up. Lagging sectors were led by technology, consumer-cyclicals and health care.

Volumes totaled 3.77 billion shares on the New York Stock Exchange and 1.85 billion shares on the Nasdaq. Advancing issues were outpacing decliners by a ratio of 1.9-to-1 on the Big Board, and 1.2-to-1 on the Nasdaq.

The University of Michigan consumer confidence index showed a read of 71.3 for January, falling from the final December print of 72.9. It was a big miss compared with the 75 level expected by economists and the weakest since December 2011.

"Escalation of the battle of wills in Washington surrounding the previous survey period saw both current and forward-looking expectations fall by the most in 21 months, and so far little respite is apparent in the current reading," Andrew Wilkinson, chief economic strategist at Miller Tabak, said of the consumer confidence report.

In earnings news, General Electric posted fourth-quarter earnings of 44 cents a share on revenue of $39.3 billion, compared with the average analyst estimate of 43 cents a share on revenue of $38.74 billion, as five of the seven industrial segments achieved double-digit earnings growth. Shares gained 3.5% on Friday.

"The outlook for developed markets remains uncertain, but we are seeing growth in China and the resource-rich countries," CEO Jeff Immelt said.

Intel exceeded analysts' fourth-quarter earnings estimates but issued guidance Thursday for the first quarter and 2013 below Wall Street views. Shares skidded 6.3%.

Morgan Stanley (MS) swung to a profit in the fourth quarter, beating expectations on equity trading and stronger performance from its wealth management unit. Shares surged 7.9% after the company's report Friday.

"Investors are less bullishly positioned into the 4Q reporting season compared to 2Q or 3Q," said Thomas Lee, chief U.S. equity strategist at JPMorgan, in a recent note. "Hedge funds have a beta of 0.104 compared to 0.249 at the start of 3Q earnings (Oct 2012), while the mutual fund beta at 0.655 is also lower than it was at that period last quarter. In other words, there is a greater potential for upside surprise compared to consensus views."

Major U.S. stock averages rallied Thursday, with the S&P 500 soaring to a five-year high, as better-than-expected economic reports outweighed disappointing quarterly results from Bank of America (BAC) and Citigroup (C).

The optionsXpress Equity Team said Thursday was "a win" for bulls, but that financials are in "a different boat. With the banks having mixed results, it looks like this sector could be in for a bit of a consolidation."

Gold for February delivery was down $3.80 to settle at $1,687 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil futures added 7 cents Friday to close at $95.56.

The benchmark 10-year Treasury was up 11/32 to dilute the yield to 1.844%. The dollar jumped 0.41%, according to the U.S. dollar index.

Capital One Financial ( COF) shares tumbled 7.5% after the company Thursday reported fourth-quarter net income available to common stockholders of $825 million, or $1.41 a share, missing analysts' consensus estimate of $1.59 a share.

Johnson Controls (JCI - Get Report) shares slumped 3% after the company reported a profit decline and gave a downbeat outlook.

American Greetings (AM) popped 5.2% after CEO Zev Weiss sweetened his buyout bid for the company to $17.50 a share from $17.18 a share.

Research In Motion (RIMM) shares jumped 6.2% after the stock was upgraded to buy from hold at Jefferies.

Netflix (NFLX) shares were upgraded to "buy" from "neutral" at Janney Capital. Shares increased 1.5%.

Visa (V - Get Report) was downgraded to "neutral" from "outperform" at Robert W. Baird. Shares were down 1%.

-- Written by Andrea Tse and Joe Deaux in New York.

>To contact the writer of this article, click here: Andrea Tse.

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