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S&P sets fresh high, posts best weekly gain in three months; Google ends above $1000

Stocks closed out the week in positive territory, with the S&P 500 extending gains to a new high, as Wall Street cheered some better-than-expected corporate earnings results.

All three major averages logged strong gains for the week, with the S&P 500 and Nasdaq posting their best weekly rally in three months.

(Read more: Cashin: This reminds me of the dot-com bubble)

Google soared nearly 14 percent to top $1000 a share for the first time, after the search-engine giant posted better-than-expected earnings on Thursday afternoon. At least 16 brokerages raised their price targets on the stock to between $880 and $1,220, with Deutsche Bank bumping up its target price by 26 percent. The stock is up more than 40 percent year to date.

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The Dow Jones Industrial Average gained 28 points to finish at 15,399.65, after fluctuating between small gains and losses for most of the session. General Electric and Caterpillar led the top performers. The blue-chip index is within 2 percent of its all-time high set in September.

The S&P 500 advanced 11.35 points to close at 1,744.50, hitting a new intraday record of 1,745.32. And the Nasdaq rallied 51.13 points to end at 3,914.28, hitting a fresh 13-year high. The small-cap Russell 2000 index and the S&P midcap 400 index also pushed to record highs.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed near 13.

For the week, the Dow gained 1.07 percent, the S&P 500 rallied 2.42 percent, and the Nasdaq jumped 3.23 percent. American Express was the top performer for the week on the Dow, while UnitedHealth tumbled.

All key S&P sectors closed in positive territory for the week, led by telecoms and financials.

Among earnings, General Electric gained to top the Dow gainers after the conglomerate posted earnings that topped expectations, though revenue fell slightly short of estimates.

Morgan Stanley gained after the financial giant posted a higher-than-expected earnings as revenue soared nearly 30 percent, fueled by equities trading and the wealth management business.

Chipotle Mexican Grill spiked to lead the S&P 500 gainers after the fast-casual restaurant chain posted better-than-expected sales and said it may lift prices in the middle of 2014 to offset higher food costs.

So far, 85 S&P 500 companies have reported quarterly results, with earnings topping expectations by an average of 4.2 percent, according to the latest data from Thomson Reuters.

Chicago Federal Reserve Bank President Charles Evans said that he doesn't see any economic signs that allow the central bank to make a move to reduce its massive bond-buying program.

"My own personal view is, I don't think that we have enough positive additional information going into the next meeting to all of a sudden decide that it's appropriate to taper," said Evans.

Trader Todd Horwitz, the author and founder of Averagejoeoptions.com, said he did not expect the Fed to start tapering its bond buying program for another year. That explained the move higher on stock markets despite a lackluster economy.

(Read more: Taper talk could be dead until next year)

"This free flow of money is going to continue..It's monopoly money, that's what we're playing with," he told CNBC. "The average guy can't get that money but the big guys can get all they want."

Lindsey Piegza, chief economist at Sterne Agee said the budget deal left an overhang of uncertainty for consumers. "We still don't have a long-term outlook," she said, warning that this will keep businesses and consumers on the sidelines.

And next week brings a deluge of data following delays due to the partial government shutdown. The closely-watched non-farm payrolls for September will be released on Tuesday.

Markets in Asia and Europe were also buoyed by the news that China's economy grew 7.8 percent in the third quarter. The yuan hit a record high for a fifth consecutive day against the weak U.S. dollar.

JPMorgan reached a tentative $4 billion settlement with the Federal Housing Finance Agency on claims the bank misled Fannie Mae and Freddie Mac about mortgages it sold to them, according to a report from Dow Jones.

Lenovo, the world's largest PC maker, signed a non-disclosure agreement to review Blackberry's books.

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up Next Week:

MONDAY: Fed's Evans speaks, Chicago Fed nat'l activity index, existing home sales; Earnings from McDonald's, Halliburton, Discover Financial, Netflix, Texas Instruments
TUESDAY: Sept. jobs report, Richmond Fed mfg index, Apple event, Nokia event, Microsoft Surface release; Earnings from DuPont, Travelers, United Tech, Amgen, Broadcom
WEDNESDAY: Mortgage applications, Sept. import/export prices, FHFA home price index, oil inventories, LinkedIn mobile strategy event; Earnings from Boeing, Caterpillar, GlaxoSmithKline, AT&T
THURSDAY: Jobless claims, PMI mfg index, new home sales*, natural gas inventories, Kansas city mfg index, Fed balance sheet/money supply; Earnings from Ford, 3M, Credit Suisse, Amazon.com, Microsoft, Western Digital, Zynga
FRIDAY: Durable goods orders*, consumer sentiment, iPhone 5s & 5c sold overseas, Twitter roadshow begins; Earnings from P&G, UPS

(*Report likely delayed due to government shutdown)

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