For Dow, good things come in 3s

NEW YORK (CNNMoney.com) -- Wall Street showed its mettle Friday, with the Dow industrials closing at a record high for the third day in a row and the Nasdaq hitting its highest point in 6 years, despite a weaker-than-expected GDP reading.

The Dow Jones industrial average (up 15.44 to 13,120.94, Charts) ended the session slightly higher, with the blue-chip barometer duplicating last week's record run-up by closing at a record high for the third straight day. For the week, the Dow gained 1.2 percent

The tech-heavy Nasdaq composite (up 2.75 to 2,557.21, Charts) added a few points and managed to eke out a new 6-year high. For the week, the Nasdaq gained 1.2 percent. The broader S&P 500 (down 0.18 to 1,494.07, Charts) index ended just below unchanged and not far from a more than six year high hit earlier in the week. For the week, the S&P 500 gained nearly 0.7 percent.

After reaching new highs Wednesday and Thursday, the major stock gauges struggled for direction for most of Friday's session as investors sorted through the GDP report's many components and welcomed another batch of strong earnings.

Nonetheless, the gains were sufficient to lift the Dow to a fresh all-time high above 13,100. The blue-chip leader also hit an intraday high of 13,148.00 during the session.

Next week the earnings parade continues with companies such as Procter & Gamble (Charts, Fortune 500), General Motors (Charts, Fortune 500) and Verizon (Charts, Fortune 500) due to report.

Economic reports abound as well. Highlights include readings on personal income and spending Monday and the April employment report Friday.

Gross domestic product growth, the broadest measure of the nation's economy, grew at a slower-than-expected 1.3 percent annual rate in the first quarter, the government said. It was the slowest pace in four years and reflected the impact of the weak housing market.

But the slow growth, paired with higher-than-expected inflation components, failed to spook investors.

"I don't think we'd be at this level if the market wasn't comfortable with the forward inflationary outlook," said Scott Wren, senior equity strategist at A.G. Edwards & Sons.

Investors have been pretty well alerted to the reality of slower growth and ongoing pricing pressure, due to recent economic reports and comments from Chairman Ben Bernanke and other Federal Reserve officials.

Additionally, the report offered some encouraging signs for the future in its consumer and business spending components, said Jonathan Golub, U.S. equity strategist at JP Morgan Asset Management.

One concern about the housing slump has been that it will drag on spending, as the refinancing boom had served to put money in the hands of consumers. So the stronger consumer number was encouraging, said Jonathan Golub, U.S. equity strategist at JP Morgan Asset Management.

At the same time, he indicated that if the consumer is slowing down, it's important to see that the corporate side is picking up some of the slack.

Should these trends hold up, that could mean the next few quarters of GDP growth won't be quite as sluggish as has been feared, he said.

The revised reading on consumer sentiment from the University of Michigan, released shortly after the start of trade, also provided some support to stocks after the final April reading was revised upward to 87.1, exceeding forecasts.

Stock investors continued to welcome stronger-than-expected first-quarter earnings, with the latest coming from Dow stock and tech bellwether Microsoft (up $1.03 to $30.13, Charts, Fortune 500) after the close Thursday.

Microsoft reported higher quarterly sales and earnings that topped estimates, sending shares 3.5 percent higher Friday.

In other news, Dow stock General Electric (up $1.00 to $36.84, Charts, Fortune 500) rose after a Citigroup analyst said the conglomerate should spin off NBC and several other units to give more focus to the company.

Other Dow gainers included Honeywell (up $1.20 to $54.89, Charts, Fortune 500), Caterpillar (up $0.76 to $73.76, Charts, Fortune 500) and 3M (up $1.10 to $81.55, Charts, Fortune 500).

On the downside, airline stocks got battered on an analyst downgrade.

The AMEX Airline index slumped more than 4 percent after J.P. Morgan downgraded six air carriers, saying it saw few catalysts to suggest upside earnings potential. Stocks mentioned included AMR Corp. (down $1.34 to $26.35, Charts, Fortune 500), Continental Airlines (down $2.53 to $36.25, Charts, Fortune 500) and JetBlue (down $0.37 to $10.00, Charts).

With 61 percent of the S&P 500 having reported, first-quarter earnings are currently on track to have risen 6.8 percent from a year earlier, according to the latest Thomson Financial estimates.

Market breadth was negative. On the New York Stock Exchange, losers edged out winners 9 to 7 on volume of 1.5 billion shares. On the Nasdaq, decliners topped advancers by 3 to 2 on volume of 2.13 billion shares.

U.S. light crude oil for June delivery rose $1.40 to settle at $66.46 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $1.50 to end at $679.50 an ounce.

Treasury prices were mostly flat with the yield on the 10-year note at 4.69 percent, little changed from late Thursday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar slipped to an all-time low against the euro before paring some of its losses and also fell modestly versus the yen.