U.S. stocks climbed on Friday, with Wall Street derailing a four-week slide with its best week this year, as quarterly results from companies including Microsoft and Procter & Gamble inspired investor enthusiasm.
"It's largely about the better-than-expected earnings today; P&G and Microsoft were both reassuring to investors. And falling gasoline prices mean the consumer has more spending money, so domestically, consumer spending is likely to pick up," said Kate Warne, investment strategist at Edward Jones.
The declining price of crude has nearly half of U.S. gas stations selling gas for less than $3.00 a gallon, with the national average at $3.07 a gallon, the lowest since January of 2011, according to AAA.
Microsoft rose after the software titan posting better-than-expected quarterly revenue; Procter & Gamble climbed after the household products maker reported quarterly results and said it would split its Duracell battery business into a separate company; and, Amazon.com dropped after the online retailer offered a weak sales outlook for the holiday quarter and third-quarter results came in below estimates.
"The worries of last week are certainly in the rear-view mirror, nobody is worrying about global growth, Ebola or energy prices. It's all about earnings, and the earnings picture is actually pretty good," said Paul Nolte, portfolio manager at Kingsview Asset Management.
"Third-quarter earnings have been fantastic, but what we're looking at now are weakening trends in fourth-quarter estimates; that's a reason not to get too giddy," said Nick Raich, CEO at the Earnings Scout.
For the past three years, corporations have followed the model of beating lowered estimates, and then lowering guidance. But the "magnitude of fourth-quarter revisions is the reason for some caution as the markets have really ripped this week," said Raich.
"Two weeks ago when everyone was panicking, and this week when everyone thinks everything is fine, we're somewhere in between," said Raich, who points to guidance from International Business Machines, Google and Amazon as among those "dragging down the overall benchmark numbers."
A report from the Commerce Department on Friday had new-home sales rising 0.2 percent to a six-year high in September, while the pace of August sales was revised sharply lower.
The numbers "continue to show that the housing market isn't in robust shape. Housing is not falling back, but it's also not making a big contribution at this point," said Warne at Edward Jones.
"I suspect lower interest rates, and then mortgage rates,will lead to better housing numbers, at least in the short term," she added.