Stocks finished mixed Friday, as investors digested a handful of tepid earnings and economic reports in addition to ongoing jitters in the euro zone. The S&P and Nasdaq posted their fourth weekly gains, while the Dow finished in negative territory for the week.
Still, all three major averages are still on pace for their best monthly gains since October 2011.
The Dow Jones Industrial Average fell 74.17 points, or 0.58 percent, to finish at 12,660.46, led by Chevron led the blue-chip laggards.
The S&P 500 cut most of its losses but still slipped 2.10 points, or 0.16 percent, to end at 1,316.33. The Nasdaq added 11.27 points, or 0.40 percent, to close at 2,816.55.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 19.
Among the key S&P sectors, utilities lagged, while financials closed higher.
For the week, the Dow declined 0.47 percent, the S&P eked out a gain of 0.07 percent and the Nasdaq rallied 1.07 percent. Among the Dow components, Caterpillar was the biggest winner, while Travelers sagged.
“What we’re witnessing is a market that’s just taking a breather and profits,” said Quincy Krosby, market strategist at Prudential Financial. “There’s a factor of seasonality moving into the markets—February tends to be a month in which we see some consolidation and I think this is a market that’s had a very good run so you’re going to see some profit taking.”
U.S. GDP expanded at a 2.8 percent annual rate, according to the Commerce Department, logging its fastest pace in 1-1/2 years in the fourth quarter, but the figure was still slightly below expectations for a 3.0 percent gain. (Read More: Economic Growth Picks Up, So Why All the Gloom?)
Meanwhile, the consumer sentiment index rose to a 11-month high in January, climbing to 75, from December's reading of 69.9, according to a the University of Michigan survey.
In Europe, Greek Finance Minister Evangelos Venizelos said the debt-ridden nation is just "one step away" from a debt swap deal with its private creditors. Venizelos' statements echo an earlier comment from European economic affairs chief Ollie Rhen who said a Greek debt deal is imminent and should be completed by the end of January.
Meanwhile, Fitch said it is downgrading Italy, Spain, Belgium, Cyprus and Slovenia, in the face of the ongoing financial and economic headwinds from the euro zone's debt crisis.
Among earnings, Chevron led the Dow laggards after the oil giant reported lower-than-expected earnings, due to rising spending on oil and gas projects offset gains from rising crude prices.
Ford also posted lower-than-expected earningson disappointing results outside North America and rising commodity costs.
Procter & Gamble quarterly profit plunged 49 percentand the household products maker lowered its guidance.
Meanwhile, Honeywell posted quarterly results that narrowly topped expectations.
Juniper Networks and Riverbed Technologies disappointed investors with gloomy first quarter outlooks that were below expectations, raising fears that demand for companies that help manage internet traffic may be weak for some time.
Starbucks reported quarterly profit ahead of expectations, but shares slipped after the coffeehouse giant handed in an outlook that fell short of estimates.
So far, only 59 percent of companies that have reported earnings so far on the S&P 500 have topped expectations, according to Thomson Reuters, much lower than usual.
JCPenney briefly hit its highest level in almost three years after the department store chain delivered a 2012 profit outlook that was well above estimates. In addition, at least three brokerages raised their price targets and rating on the firm.
3M’s board of directors are divided over whether to extend the contract of chief executive George Buckley once it expires in a month, according to the Wall Street Journal.
Transocean gained, as a federal judge ruled that the deepwater drilling company won’t have to pay third-party compensatory damagesrelated to the Gulf oil spill, but may still be liable for punitive damages.
On the M&A front, Eastman Chemical said it will purchase Solutia in a deal worth $3.38 billionin an aim to expand its presence in Asia Pacific.
Meanwhile, Facebook said it could file for an IPO as early as next Wednesday, with Morgan Stanley likely to be its main underwriter, according to the Wall Street Journal.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
On Tap Next Week:
MONDAY: Personal income & spending, Dallas Fed mfg survey
TUESDAY: Employment cost index, S&P Case-Shiller home price index, Chicago PMI, consumer confidence, Florida GOP Primary vote; Earnings from ExxonMobil, Eli Lilly, Pfizer, UPS, Amazon.com, Broadcom
WEDNESDAY: Weekly mortgage applications, Challenger job-cut report, ADP employment report, Fed's Plosser speaks, ISM mfg index, construction spending, oil inventories, auto sales; Earnings from Aetna, Marathon Oil, Qualcomm, Electronic Arts
THURSDAY: Jobless claims, productivity and costs, Fed's Fisher speaks, chain-store sales; Earnings from AstraZeneca, Deutsche Bank, Merck, Royal Dutch Shell, Sony, Unilever, beazer Homes
FRIDAY: Employment situation, factory orders, ISM non-mfg index; Earnings from Clorox
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