Stocks eked out gains in choppy trading Friday but major averages rallied sharply for the week, with the S&P 500 and Nasdaq posting their second best weekly gains this year.
The Dow Jones Industrial Average squeezed out gain of 3.38 points, to close at a new high of 15,464.30, led by Bank of America and American Express. Boeing tumbled more than 4 percent, dragging the blue-chip index down by almost 40 points.
The S&P 500 gained 5.17 points, to end at a fresh high of 1,680.19. And the Nasdaq climbed 21.78 points, to finish at 3,600.08. Both indexes finished higher for the seventh-consecutive session. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed below 14.
For the week, the Dow jumped 2.17 percent, the S&P 500 soared 2.96 percent, and the Nasdaq surged 3.47 percent. Nine out of the 10 key S&P sectors ended in positive territory, led by utilities, while telecoms finished in the red.
Boeing suffered its worst one-day drop in nearly two years following a fire that broke out at London's Heathrow Airport on one of the company's troubled Dreamliner planes. Earlier in the session, the stock hit an all-time high at $108.15 a share.
Separately, another Boeing 787 Dreamliner operated by Britain's Thomson Airways flying to the United States from northwest England was forced to return to Britain due to technical issues.
"It wouldn't be unusual to see a bit of a pullback after this strong run, but we're in earnings season, where the results will dominate all other variables—expectations are quite low and management teams seem to have done a good job of setting the bar at ankle height, so it seems likely that we'll have more positive surprises," said Lawrence Creatura, portfolio manager at Federated Investors.
Among earnings, Dow component JPMorgan Chase slipped even after the financial giant beat expectations on both revenue and earnings. Meanwhile, Wells Fargo gained after the financial company topped the Street on both ends.
The banks were the first major U.S. financials to report second-quarter earnings, setting the tone for the rest of the sector which will issue results throughout next week. Earnings expectations for JPMorgan in particular were high, as the bank has beaten analyst estimates in 12 of its last 13 earnings reports.
Major averages soared more than 1 percent on Thursday, with the Dow and S&P 500 closing at record highs, boosted by dovish comments from Fed Chairman Ben Bernanke.
Meanwhile, Philadelphia Federal Reserve President Charles Plosser said the Fed should wind down quantitative easing by the end of 2013. He said policy makers should treat 6.5 percent unemployment and 2.5 percent inflation targets as "triggers," not "thresholds."
United Parcel Service tumbled after the package delivery company estimated second-quarter profit below analysts' expectations, hurt by overcapacity in the global air freight market and a slowing U.S. industrial economy. Rival FedEx also declined.
WebMD spiked more than 25 percent after the health information provider said it expects to post its first profit in six quarters, thanks to increased revenue from its public portals in the second quarter.
Dell was flat after billionaire investor Carl Icahn and Southeastern Asset Management sweetened their bid for the tech company in an effort to counter a $24.4 billion buyout offer from company founder Michael Dell and private equity firm Silver Lake. Dell shareholders will vote on the offer July 18.
On the economic front, producer prices gained 0.8 percent in June, according to the Labor Department, edging past expectations for 0.5 percent. Meanwhile, core producer prices, which exclude volatile energy and food costs, edged up 0.2 percent.
Meanwhile, Thomson Reuters/University of Michigan Surveys of Consumers' preliminary July consumer sentiment index fell to 83.9 from the final June figure of 84.1. Economists in a Reuters survey expected a preliminary July sentiment index reading of 85.0 compared with 84.1 in the final June report.
European shares pared their earlier gains to close slightly lower, after posting four days of successive gains. Meanwhile, the yield on Portugal's benchmark government bonds surged, following demands for a renegotiation of its bailout program.
After the European market close, Fitch slashed its credit rating on France to AA-plus from AAA with a "stable" outlook citing the country's uncertain economic outlook and the need for structural reform.
And shares in Asia traded cautiously ahead of Chinese growth data next week.
China is expected to post second-quarter gross domestic product (GDP) numbers on Monday, after a slew of disappointing trade and manufacturing reports. Investors' nerves were piqued on Friday by reports that the Chinese finance minister was forecasting annual growth of only 7 percent, below the country's official growth target of 7.5 percent.
"We see no hard landing but rather steady growth. Our 7.7 percent GDP forecast is based on a stronger consumption component, making up for the slowdown in investment," wrote Steve Wang, research director at Reorient Markets, in a note.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up Next Week:
MONDAY: Fed's Tarullo speaks, retail sales, Empire state mfg index, business inventories, Oracle on NYSE, Tesla on Nasdaq 100; Earnings from Citigroup
TUESDAY: CPI, Treasury int'l capital, industrial production, NAHB housing market index, Fed's George speaks; Earnings from Coca-Cola, Goldman Sachs, Johnson & Johnson, Charles Schwab, Yahoo, CSX
WEDNESDAY: MBA mortgage applications, housing starts, Ben Bernanke speaks, oil inventories, Beige book; Earnings from Bank of America, Novartis, Abbott Labs, Bank of NY Mellon, Mattel, American Express, Ebay, IBM, Intel, Sandisk
THURSDAY: Jobless claims, Ben Bernanke speaks, Philadelphia Fed survey, leading indicators, natural gas inventories, Fed balance sheet/money supply, Dell special shareholder mtg; Earnings from BlackRock, Morgan Stanley, United Health, Verizon, Nokia, Google, Microsoft, AMD, Capital One, Chipotle
FRIDAY: G20 in Russia; Earnings from GE, Schlumberger, Vodafond, Honeywell
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