Stocks clawed higher Friday as solid earnings from Disney and JCPenney helped offset worries about a drop in consumer sentiment.
It was a wobbly morning: Stocks started the day higher, then retreated, then made another push higher.
The Dow snapped a six-day winning streak Thursday, sliding nearly 1 percent, but is still on track to finish up for the week.
Reuters and the University of Michigan reported their gauge of consumer sentiment dropped to 66 in November, its lowest level in three months and well below the 71 economists had expected.
Earlier, a report showed the US trade deficit swelled to its highest level in more than 10 yearsas import prices climbed 0.7 percent.
The news was good from overseas: Germany and France both logged their second straight quarters of growth. And IMF managing director Dominique Strauss-Kahn said he doesn't see a double-dip recession.
Disney was the biggest gainer on the Dow after the entertainment giant beat expectationsfor both earnings and revenue after the bell Thursday.
Merck and Travelers rounded out the Dow's top three.
J.C. Penney gained after the department-store operator reported its profit fell but raised its full-year forecast.
This came a day after Wal-Mart beat earnings expectations but delivered a light holiday forecast.
Elsewhere in retail, teen chain Abercrombie & Fitch, which has been hard hit by the recession, beat earnings expectations. High-end retailer Nordstrom missed Wall Street's profit target but raised its full-year outlook.
JPMorgan shares slipped after CEO Jamie Dimon said no bank should be considered too big to fail. Such an idea is "politically, economically and ethically bankrupt,'' Dimon wrote in an op-ed in the Washington Post.
Dollar General rallied in its debut on the New York Stock Exchange. Shares priced last night at $21 a share. The IPO raised $716 million.
Qualcomm shares rose after Wells Fargo upgraded its rating on the stock to "outperform." The stock is a good way to play all the smartphonesif you don't want to call a winner, since their chips are in most smartphones, Morgan Keegan analyst Tavis McCourt said earlier this week on Fast Money.
Some big M&A news from overseas: British Airways and Iberia announced a $7 billion merger that would create the world's third-largest airline by revenue.
And, Liberty Global is planning to acquire Unity Media, Germany's No. 2 cable operator in a deal worth $3 billion.
An interesting deal on this side of the pond: Playboy is apparently in talks to sell itself to Iconix , which owns the Candies, Joe Boxer and Rocawear brands.
Oil was below $77 a barrelafter Saudi Oil Minister Ali al-Naimi says the Saudis will double their oil refining capacity by 2015.
Gold was around $1,107 an ounce, after touching an all-time peak of $1,122.85 yesterday, and the dollar edged higher against the euro but dropped against the yen.
Still to Come:
FRIDAY: NY Fed conference on financial intermediation; consumer sentiment; Nicholas Cosmo court appearance; Fed's Evans speaks
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