NEW YORK — The Standard & Poor’s 500 edged up to a five-year high Friday, extending a rally that started in January.
The S&P 500 rose 8.54 points to 1,517.93, closing 0.3 percent higher for the week. The index is at its highest since November 2007 and has advanced for six weeks, the longest streak of gains since August.
The Dow Jones industrial average rose 48.92 points, or 0.4 percent, to 13,992.97. The Nasdaq composite climbed 28.74 points, or 0.9 percent, to finish the week at 3,193.87.
One stock fell for every two that rose on the New York Stock Exchange. Consolidated volume was thinner than usual because of the winter storm in the Northeast - 2.9 billion shares compared with the recent average of 3.5 billion.
The Dow had its best January in almost two decades and closed above 14,000 on Feb. 1 for the first time since 2007. The index is up 6.8 percent so far this year; the S&P 500 is up 6.4 percent.
Optimism about the housing sector and gradual improvements in the jobs market helped power the rally.
The S&P 500 finished the week higher despite logging its biggest daily decline in almost three months Monday after worrying news from Europe.
The index fell 1.2 percent that day as bond yields in Spain and Italy rose on concern that the region’s politicians will drag Europe back into crisis. European Central Bank President Mario Draghi’s cautious comments about the region’s economy also weighed on markets Thursday.
“Everybody seems to be saying this market needs to correct,” said Robert Pavlik,chief market strategist at Banyan Partners. “Nobody wants to be in it, but nobody wants to be out of it.”
Largely positive corporate earnings reports and a report that showed that the U.S. trade deficit narrowed sharply in December provided more fuel for the market’s advance Friday.
Shares of LinkedIn, the online professional networking service, jumped $26.39, or 21.3 percent, to $150.40 after the company reported fourth quarter results late Thursday that beat analysts’ forecasts. AOL soared $2.31 to $33.72 after the Internet company said its quarterly revenue grew for the first time in eight years, helped by strength in worldwide advertising.
Currently, analysts are expecting earnings for the fourth quarter of 2012 to rise 6.5 percent for S&P 500 companies, according to data from S&P Capital I&Q. That’s an increase from the 2.4 percent growth rate recorded for the preceding quarter.
Stocks have benefited as investors poured a net $4.1 billion into stock mutual funds since the start of the year, according to data provided by Lipper, an analysis service.
“I’m very encouraged by the fact that finally, for the first time in many years, individual investors seem to be participating in this,” said David Kelly, chief global strategist at J.P. Morgan Funds.
The yield on the 10-year Treasury note, which moves inversely to its price, fell one basis point to 1.95 percent.
Trading volume was light as Wall Street braced for what is forecast to be the largest winter storm in more than a year. Up to 2 feet of snow was forecast along the densely populated Interstate 95 corridor from the New York City area to Boston and beyond.
Business, Pages 28 on 02/09/2013