Stocks Gain as Economy, Earnings Strengthen

NEW YORK ( TheStreet) -- Major U.S. stock averages gained Friday as investors tracked the European markets and got a boost from better-than-expected trade data and earnings reports. Apple ( AAPL) shares tacked on 1.4% to $474.98.

Weather alerts also were in focus, as the National Weather Service warned that the Northeast and New England are expected to be hurt by a major winter storm Friday and into Saturday. As much as one to two feet of snow is forecast for the New York City metro area to Maine.

The Dow Jones Industrial Average rose 49 points, or 0.35%, at 13,993. The gains weren't enough to boost the blue-chip index into positive territory as it fell 0.12% on the week.

Winners were outpacing losers 21 to eight on the Dow. The strongest gainers were UnitedHealth ( UNH), Hewlett-Packard ( HPQ), Microsoft ( MSFT) and Home Depot ( HD).

Boeing ( BA), American Express ( AXP) and Bank of America ( TRV) were among Dow stocks that posted the largest declines.

Boeing shares fell 1.1% as Reuters reported the aerospace giant told two European airlines on Friday that their deliveries of 787 Dreamliner jets would be delayed, as safety investigations into the aircraft continued.

The S&P 500 rose 9 points, or 0.57%, at 1,518. The index increased 0.31% for the week. The Nasdaq added 29 points, or 0.91%, at 3,194. The tech-heavy index ticked up 0.46% for the past five sessions.

Joe Bell, senior equity analyst with Schaeffer's Investment Research, said with the snowstorm set to hit several states, "we could be in for lighter trading than we normally see on option expiration weeks."

"As the broad markets attempt to break free of this recent congestion, the recent volatility in Europe and retail sales could steal the headlines" next week, Bell added.

Any dips in the markets wouldn't surprise Bell. "After a strong rally to start the year and the S&P 500 near the round number 1,500, it was a logical time for a breather," he said.

Apple shares spiked Friday, just a day after David Einhorn asked shareholders to vote against the company's proposal to do away with preferred stock.

Only the utilities sector was ticking lower. All other sectors were rising in the broad market, led by technology, health care, financials and consumer cyclicals.

Volumes were light Friday at 2.96 billion shares on the Big Board and 1.82 billion shares on the Nasdaq. Advancers edged decliners by a ratio of 2.1-to-one on the New York Stock Exchange and 1.7-to-1 on the Nasdaq.

In the economy, the Census Bureau said Friday that the U.S. trade deficit shrank to $38.5 billion in December from $48.7 billion in November. Economists were expecting the deficit to shrink to $46 billion.

A Capital Economics report said that the unexpected narrowing of the U.S. trade deficit essentially ensures that the recently reported dip in fourth-quarter GDP will be revised to a small gain in the second estimate.

The Census Bureau also reported Friday that wholesale inventories fell 0.1% in December after rising by a downwardly revised 0.4% in November. Economists expected wholesale inventories to rise 0.4% in December.

Asian markets closed mostly higher Friday following strong trade data from China, though there were some concerns about holiday season-related distortions of the data. The Nikkei in Japan was an exception, however, finishing down 1.8% while Hong Kong's Hang Seng closed up 0.16%.

The DAX in Frankfurt closed up by 0.81% and the FTSE in London settled up 0.57%, as European markets digested the China data and as peripheral bond yields fell.

Gold for April delivery settled down $4.40 at $1,666.90 an ounce at the Comex division of the New York Mercantile Exchange, while March crude oil futures closed off 11 cents at $95.72 a barrel.

The benchmark 10-year Treasury climbed 2/32 to dilute the yield to 1.950%. The dollar was down 0.01%, according to the U.S. dollar index.

In corporate news, LinkedIn ( LNKD), the social network geared for professionals, beat Wall Street's earnings expectations. Shares surged 21.3%.

Coinstar ( CSTR), which owns the Redbox DVD kiosks, said fourth-quarter profit declined 27% due to poor performance at its new ventures. Shares slid 7%.

U.S. electronics retailer RadioShack ( RSH ) announced that Walgreen ( WAG ) executive Joseph Magnacca has been appointed CEO of the company. Magnacca served as president of Duane Reade from July 2010 to April 2011. Shares gained 10%.

AOL ( AOL) said its fourth-quarter revenue grew year-over-year, making for the first quarterly increase in eight years as global advertising revenue rose. Shares popped 7.4%.

Activision Blizzard ( ATVI), the maker of video game "Call of Duty," posted fourth-quarter earnings that topped analysts' estimates as revenue jumped 26% to $1.77 billion. Shares jumped 11.2%.

Activision said Thursday it expects first-quarter adjusted earnings of 10 cents a share on revenue of $690 million. Analysts expect earnings of 9 cents a share on revenue of $693.5 million.

Moody's ( MCO) posted fourth-quarter earnings that beat expectations by a penny, and better-than-expected revenue. Its full-year outlook also topped estimates, as the rating agency benefited from an increase in global corporate bond issuances.

Still, shares fell 7.7% on concerns that the government might take legal action against Moody's over its mortgage securities ratings after rival Standard & Poor's was accused by the Justice Department of optimistic mortgage-backed securities ratings prior to the financial crisis.

Skullcandy ( SKUL) shares tumbled 7% after the audio accessories company said Jeremy Andrus has decided to step down as CEO. The company's founder and former CEO, Rick Alden, will step in as the company's interim CEO.

OpenTable ( OPEN) shares rose 7.5% after the online restaurant reservations company beat fourth-quarter earnings estimates as it saw numbers of seated diners grow by 22% from the prior year.

ExOne ( XONE) shares surged 13.5%.

Caesars Entertainment ( CZR) shares soared 38.1% after New Jersey Gov. Chris Christie indicated a willingness to permit a 10-year trial period for online betting to observe whether it would help bring revenue to Atlantic City casinos. Caesars Entertainment is Atlantic City's biggest casino operator.

-- 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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