Stocks ended the week on a positive note, with the Dow snapping a four-day losing streak, as investors were encouraged over the "fiscal cliff" talks in Washington, but still closed sharply lower for the week.
The Nasdaq logged its sixth consecutive week of losses, its longest streak in over three years. And the Dow posted its fourth straight losing week, the longest since last August.
The Dow Jones Industrial Average gained 45.93 points, or 0.37 percent, to close at 12,588.31, snapping a four-day losing streak. Alcoa andHome Depot led the blue-chip gainers, while H-P sagged.
The S&P 500 climbed 6.55 points, or 0.48 percent, to end at 1,359.88. The Nasdaq rose 16.19 points, or 0.57 percent, to finish at 2,853.13.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 17.
For the week, the Dow dropped 1.77 percent, the S&P 500 fell 1.45 percent, and the Nasdaq declined 1.78 percent. Microsoft was the biggest weekly laggard on the Dow, while Cisco jumped.
All key S&P sectors finished in the red for the week, led by industrials and materials.
"I believe that the framework that I've outlined in our meeting today is consistent with the President's call for a fair and balanced approach," said Republican House Speaker John Boehner following the meeting with President Barack Obama. "I believe we can do this and avert the fiscal cliff that's right in front of us today." (Read More: How to Trade the 'Fiscal Cliff' Drama If No Deal Is Reached)
Worries over the fiscal cliff have pressured stocks ever since last week's presidential election, pushing major indexes down more than 5 percent across the board so far.
Earlier, White House officials were said to be in discussions to replace the so-called sequester—a slew of spending cuts that along with tax increases will take place automatically at the end of the year and likely put the U.S. into recession—with a package of smaller, more targeted spending cuts and tax increases, according to the Wall Street Journal.
"We're winding down earnings season and this should traditionally be a quiet news period, but with these negotiations going on, it will be the focus of the markets until they get settled," said John Fox, co-manager of the FAM Value Fund.
Facebook soared, continuing its post-lockup expiration rally and after the social-networking giant announced an expansion of Facebook Gifts ahead of the holiday shopping season. The company's stock is now up nearly 20 percent since Tuesday. Still, S&P reiterated its "hold" rating on the stock.
Meanwhile, Apple ended higher, rebounding after the iPad maker briefly traded near a nine-month low earlier in the session. Shares are now off 25 percent since hitting an all-time high in late September. (Read More: Once in a Lifetime Opportunity to Buy Apple?)
Separately, rival Google is close to releasing a "Maps" app for Apple's iOS6, according to the Wall Street Journal.
Among earnings, Dell slumped after the hardware giant missed earnings expectations and added that challenging macroeconomic conditions could put a pressure on the current quarter. At least 10 brokerages slashed their price target on the company.
Gap rallied after the clothing retailer posted better-than-expected earnings and boosted its profit outlook for the year. Canaccord Genuity raised its rating on the company to "hold" from "sell."
Sears slumped even after the department-store chain posted a narrower-than-expected loss and topped revenue estimates.
UPS slipped after the package delivery service said it is increasing its rates on all UPS Air and U.S. origin international services next year. Rival FedEx also edged lower.
Nike announced it will sell its Cole Haan brand to Apax Partners for $570 million. The transaction is expected to be complete in early 2013.
On the economic front, industrial production unexpectedly declined in October due to Hurricane Sandy, according to the Federal Reserve. The Fed said the storm is estimated to have reduced the rate of change in output by nearly 1 percentage point.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
On Tap Next Week:
MONDAY: Existing home sales, housing market index; Earnings from Lowe's, Tyson Foods, Urban Outfitters, Jack in the Box
TUESDAY: Housing starts, Richmond Fed's Lacker speaks, Bernanke speaks at the Econ. Club of New York, Kindle Fire HD w/4G LTE ships; Earnings from Hewlett-Packard, Best Buy, Campbell Soup, Chico's, Salesforce.com
WEDNESDAY: Weekly mortgage applications, jobless claims, PMI manufacturing index flash, consumer sentiment, leading indicators, oil inventories; Earnings from Deere
THURSDAY: Happy Thanksgiving! - Markets closed
FRIDAY: Black Friday - NYSE closes at 1pm ET / CME closes at 1:15pm ET
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