Stocks posted their fourth straight week of gains, pushing the Dow Jones Industrial Average to its third record close in row.
The markets were boosted by better-than-expected corporate earnings, which managed to outweigh a weaker-than-expected estimate of first-quarter economic growth.
"I think the reason the market appears to be doing better than the economy right now is the decent job managers are doing at incorporating improvements in productivity," said Rob Lutts, chief investment officer at Cabot Money Management. "Corporations are making gains on the bottom line without making gains on the top line," he said, referring to earnings and revenue.
The Dow climbed 1.2% for the week and is up 6.2% so far for April, its best month since December 2003. The Nasdaq also rose 1.2% for the week and is up 5.6% for April, its best month since July 2005. The S&P 500 was up 0.7% for the week and is 5.2% higher for April, its best month since October 2003.
The Dow was boosted Friday by technology bellwether Microsoft, which reported solid profits. Positive broker comments on 3M,another Dow component, boosted the diversified manufacturer's shares.
Another Dow standout was General Electric, whose shares surged after a Citigroup analyst wrote that the conglomerate should spin off NBC and several other units to unlock value in its core business. CNBC is part of NBC Universal.
"On balance, this move on the market has got to be considered impressive," said Michael Metz, chief investment strategist at Oppenheimer. "It's partly earnings, but it's more importantly liquidity. There's a huge amount of money in the system and frankly it's finding alternatives not very attractive."
The market had been kept in check most of the day by mixed economic data. First-quarter gross domestic product (GDP) rose an estimated 1.3%, less than the annual rate of 1.8% that was expected. But the University of Michigan consumer sentiment index for April was higher than expected.
The euro hit a record high against the dollar after the release of the GDP data. Treasury prices rose, sending yields lower.
Energy giant Chevron said Friday its first-quarter earnings rose, despite revenue declining from the same quarter last year, due to relatively low crude and gas prices.
Shares of Waste Management Inc. were higher after the nation's largest garbage hauler said its first-quarter profit rose from a year ago, helped in part by revenue growth at its commercial collection and landfill business.
Fast-food chain operator Burger King said it swung to a profit in the third quarter on sales of new sandwiches.
European Stocks Lower
European stock markets closed lower after the GDP data showed economic growth in the U.S. slowed more than expected.
The London FTSE-100, the Paris CAC-40 and the Frankfurt DAX all traded lower.
In corporate news, the ongoing battle to takeover ABN Amro turned hostile Friday as a consortium led by Royal Bank of Scotland announced it intends to bid for 100% of Dutch bank, which already agreed a takeover deal with Britain’s Barclays.
The RBS group, which also includes Spain's Santander and Fortis, previously trumped the Barclays’ offer with a $98 billion bid, but that deal required the scrapping of the proposed sale of U.S. banking unit LaSalle to Bank of America.
Asian Stocks Fall on Profit-Taking
Asian markets were on the decline in the afternoon session Friday with Japan ending a touch lower on profit-taking and South Korea also closing down on currency concerns.
Tokyo's Nikkei 225 Average closed a touch lower as investors booked profits on technology shares.
Australia's S&P/ASX 200 Index finished lower as investors turned cautious ahead of key U.S. economic growth data due later in the day, with big miners leading losses following a fall in base metal prices.
Chinese stocks fell as the approach of a week-long public holiday starting next Tuesday prompted investors to take profits, despite a much stronger-than-expected debut by CITIC Bank.
Hong Kong stocks tracked Shanghai-listed shares lower, with mainland financial plays down as investors worried China could issue more tightening measures before the country's long holiday next week.
Singapore stocks fell as investors cashed in on gains in blue chips that had hit record highs in recent sessions such as ST Engineering and City Developments.