Dow Gains During Big Earnings Week

NEW YORK ( TheStreet) -- Blue-chip stocks posted their first weekly gain in three as a wave of strong earnings reports offset worries about Europe and the global economy.

The Dow Jones Industrial Average rose 65 points, or 0.5%, to close at 13,029 after rising to as high as 13,082 earlier Friday.

The S&P 500 added 1 point, or 0.1%, at 1378. The Nasdaq finished in the red, down 7 points or 0.2% at 3000, with shares of Apple ( AAPL) hitting a one-month low.

The Dow gained 1.4% this week, while the S&P 500 edged up 0.6% and the Nasdaq lost 0.6%.

Stocks began Friday on a strong note, as investors cheered strong quarterly reports from Dow companies on Thursday and Friday, and good economic data out of Europe. Markets lost steam by the end of the session as investors looked ahead to the earnings reports scheduled for next week.

"Next week there's just a tremendous number of earnings coming out and it's more of a reflection of what we've seen so far, which has been very mediocre earnings with not a lot of positive guidance going forward," says Jeffrey Sica, president and chief investment officer of SICA Wealth Management.

Despite the strong number of better-than-expected quarterly results so far, some investors remain skeptical of the financial state of major companies.

"Earnings continue to impress, outlooks are decent, not outstanding," said Mark Lamkin, president and CEO, Lamkin Wealth Management. Still, he said investors have been too cautious about earnings.

"This is kind of the Rodney Dangerfield economy, and Rodney Dangerfield markets -- it gets no respect," he says. "It's record GDP, it's record S&P 500 earnings, it's the best auto sales since 2008, it's 24 months of employment growth, and investors are still nervous."

Among the 30 Dow stocks, 22 stocks rose on Friday and eight declined. Microsoft ( MSFT) led the Dow higher, advancing 4.6% after the Redmond, Wash.-based software giant reported third-quarter earnings of 60 cents a share on $17.41 billion in revenue after the bell on Thursday. Analysts polled by Thomson Reuters had expected earnings of 57 cents a share on $17.16 billion in revenue.

Travelers ( TRV), Verizon ( VZ), Procter & Gamble ( PG) and General Electric ( GE) were other gainers on the Dow.

GE reported first-quarter operating earnings of $3.6 billion, or 34 cents a share, compared to $4.2 billion, or 39 cents a share, during the fourth quarter, and $2.3 billion, or 21 cents a share, during the first quarter of 2011. The first-quarter earnings came in ahead of the 33-cent estimate among analysts polled by Thomson Reuters. Shares added 1.2% at $19.36.

Hamburger giant McDonald's ( MCD) posted in-line, adjusted first-quarter earnings of $1.23 a share, up from $1.15 a share the same time last year, and revenue of $6.55 billion, up from $6.11 billion the prior year. The company was expected by analysts to post earnings of $1.23 a share in the March-ended quarter on revenue of $6.54 billion. The stock edged up 0.7% at $95.94.

Bank of America ( BAC) was a prominent loser on the Dow, falling 4.7% to $8.36. Four analysts raised their target prices on Bank of America shares, following its first-quarter earnings announcement Thursday, but CLSA analyst Mike Mayo slapped a "sell" rating on the stock.

In other stock news, SanDisk ( SNDK) shed 11.3% to $35.91 after it forecast second-quarter sales that fell short of analysts' estimates.

AMD ( AMD), the No. 2 chipmaker, posted a loss of $590 million, or 80 cents a share, compared with net income of $510 million, or 68 cents, a year earlier. Excluding items, AMD earned 12 cents a share on net income of $92 million, up from 8 cents a share and $56 million in the same period last year. Analysts were looking for earnings of 9 cents a share. Shares lost 2.6% to $7.76.

Denver-based restaurant operator Chipotle Mexican Grill ( CMG) reported a profit of $62.7 million, or $1.97 a share, on revenue of $640.6 million, up more than 25% from last year. The performance bested the average estimate of analysts polled by Thomson Reuters for earnings of $1.93 a share in the March-ended quarter on revenue of $630.9 million. Shares of Chipotle lost 2.7% to $419.26.

U.S. Airways ( LCC) said it has the backing of the three largest unions at American Airlines ( AMR) for a merger and has also reached tentative contract agreements with the Tempe, Arizona-based carrier.

AMR is scheduled to go into bankruptcy court on Monday to abrogate its union contracts. The unions say that a deal with US Airways would mean "avoiding a lengthy and contentious 1113 process (so that) the new carrier would be able to emerge from bankruptcy more quickly."

Shares of US Airways finished lower by 1.8%.

London's FTSE gained 0.5% and Germany's DAX finished higher by 1.1% as March U.K. retail sales, published Friday, rose 1.8% versus an expected 0.5%, and the Ifo institute's April business climate index for Germany increased to a nine-month high with its sixth consecutive rise to 109.9.

Financial officials from the International Monetary Fund, World Bank and G20 are meeting met in Washington, D.C., Friday. Leaders from Russia and other developing nations said they're ready to help meet the International Monetary Fund's request for at least $400 billion to defend against flare-ups in the eurozone crisis , according to Reuters. Brazil is seeking increased voting before before it commits aid.

June oil futures added $1.16 to settle at $103.88 a barrel, while June gold futures edged up $1.40 to settle at $1,642.80 an ounce.

The benchmark 10-year Treasury was unchanged, with the yield at 1.97%, while the U.S. dollar index was lower by 0.5%.

-- Written by Andrea Tse and Shanthi Bharatwaj in New York.

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