Stocks gained for a second straight week as company earnings reports started to come in, keeping the Standard and Poor's 500 index within a fraction of its highest level in five years.
The S&P 500 was little changed Friday, and gained 5 points in the week to close at 1,472.05. The index is a fraction below its close of 1,472.12 Thursday, its highest level since December 2007.
Companies have started to report earnings for the fourth quarter of 2012, but no clear pattern has emerged as yet.
Aluminum company Alcoa gave stocks a lift after it reported earnings late Tuesday that matched analysts' expectations and said that demand was increasing. Investors were unimpressed by Wells Fargo's record profits Friday, choosing instead to focus on the sustainability of those earnings.
"You've been hearing comments that earnings season is going to show a continued contraction in the rate of growth," said Robert Pavlik of Banyan Partners. "People are conflicted, they are worried, but at the same time they don't want to be missing out on the action in the overall market."
Currently, analysts expect fourth quarter earnings for S&P 500 companies to grow at a rate of 3.3 percent, according to the latest data from S&P Capital IQ. That's a better growth rate than the previous quarter, but it's considerably weaker that the 8.4 percent growth rate recorded in the same period last year.
Wells Fargo, the first major bank to report earnings, dropped even after the bank reported a 25 percent increase in fourth-quarter earnings. The bank's stock fell 30 cents, or 0.8 percent, to $35.10.
JPMorgan Chase, Goldman Sachs, U.S. Bancorp, Citigroup and Bank of America are among banks and financial companies reporting earnings next week. Financial stocks were the best performing industry group in the S&P 500 last year, gaining 26 percent. Other companies reporting earnings next week include eBay and Intel.
Boeing fell $1.93, or 2.5 percent, to $75.16 after the U.S. Federal Aviation Administration said it is launching a comprehensive review of the critical systems of Boeing's 787, the aircraft maker's newest and most technologically advanced plane, after a fire and a fuel leak earlier this week.
Stocks are up on the year after lawmakers came up with a last-minute deal to prevent the U.S. from going over the "fiscal cliff." That averted the threat of a series of tax hikes and spending cuts Jan. 1 that economists say would almost certainly have pushed the U.S. economy into recession.
Avoiding the "cliff" will likely have boosted consumer confidence, said Chris Kichurchak, vice president at Strategic Wealth Partners. That improving sentiment, combined with a strengthening housing market, should prove favorable to so-called cyclical companies that move in line with the economy.
"There are a lot of people who were holding out on spending," before a budget deal was struck, said Kichurchak.
Investors started the year by jumping into stocks, according to Bank of America Merrill Lynch research. Just over $22 billion was invested in equities in the first full week of this year, the second-highest weekly in-flow on record after the $22.8 billion that was invested in September 2007.
The yield on the 10-year Treasury note, which moves opposite to the security's price, fell 4 basis points to 1.86 percent.
Other stocks making big moves;
— American Express rose 45 cents, or 0.7 percent, to $61.24 after the company said that spending by cardholders jumped 8 percent in the fourth quarter, even after Superstorm Sandy crimped some buying.
— Best Buy jumped $2, or 16.4 percent, to $14.21 after the struggling consumer electronics chain reported holiday sales. The company's U.S. performance was flat and, while this was a hair below the 0.3 percent increase that Best Buy reported in the prior-year period, it was an improvement over the past several quarters.
— Ford rose 17 cents, or 1.2 percent, to $14. The company said demand for new vehicles is accelerating in the U.S. Ford plans to hire 2,200 engineers, computer programmers and other white-collar workers this year. The automaker said Thursday it was raising its dividend.
— Corning fell 19 cents, or 1.5 percent, to $12.45 after Goldman Sachs removed cut its rating on the specialty glass manufacturer to "neutral" from "buy," saying that it expected first quarter sales to decline more than previously expected.