By Matt Krantz
An anticipated temporary boost in the debt ceiling, coupled with a strong start to earnings season, prompted investors to push stocks to fresh five-year highs.
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Both the Dow Jones industrial average and the Standard & Poor's 500 jumped to their highest levels in five years Friday, the first time they've both done that together since late 2012. Even more importantly, both of these major market measures are steadily marching closer to all-time highs.
Following its 53.68 point gain Friday to 13,649.70, the Dow is now less than 4% away from its all-time high, notched in October 2007. The S&P 500 is 5.1% away, following its 5.04 point gain Friday to 1485.98.
Investors' low expectations for fourth-quarter earnings season have been easy hurdles for companies to best so far. Just 67 members of the S&P 500 have reported, but 43 of those have beaten expectations while just 14 have missed, says S&P Capital IQ. All told, analysts are now expecting earnings growth to come in at 4.0%, marginally better than the 3% growth expected coming into the earnings reporting season.
Companies delivering those better-than-expected results late in the week included investment bank Morgan Stanley and General Electric.
Stocks had been under pressure late last year as investors fretted about the looming fiscal battles between politicians over the U.S. budget deficit. But that concern was further put to rest Friday when House Republicans indicated their plan to pass a three-month extension to the nation's debt limit next week. Stock markets in the U.S. will be closed Monday for the Martin Luther King Jr. holiday.
Even though investors had plenty of news to digest, trading was largely quiet. "Earnings always matter," said Rex Macey, the chief investment officer of Wilmington Trust Investment Advisors told The Associated Press. "But just because we're in the middle of earnings season doesn't mean we're going to get huge market moves."
Helping tech stocks were Nextflix, closing just below $100 a share, and a continuing rally of Blackberry-maker RIMM, up 6.2%. But the gains weren't enough to offset the impact of a disappointing earnings report out late Thursday from chipmaker Intel, whose shares stumbled 6.3%.
The tech-heavy Nasdaq composite ended basically flat for the day, slipping 0.03%, or about a point.
The IPO of Norwegian Air Lines, priced late Thursday at $19 a share, leaped 31%, settling at $24.89 at the close of the regular trading session.
MARKETS: S&P 500 ends at new five-year high
In Europe, Britain's major stock index was up 0.5% while key indexes in France and Germany were lower.
Markets in Asia finished the week higher. The Shanghai Composite index climbed 1.4% and Japan's Nikkei stock index ended the day with a 3% rise. European markets were also firmer.?
In China, economic growth rose to 7.9% in the three months ending in December, up from the previous quarter's 7.4%, data showed Friday. For the year, the economy grew by 7.8%, which was China's weakest annual performance since the 1990s.
GLOBAL ECONOMY: China's growth rebounds but still vulnerable
Contributing: USA TODAY's Kim Hjelmgaard and The Associated Press