S&P 500 closes above 1,500 for 1st time since 2007

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U.S. stocks ended the week on a high note Friday, as investors welcomed a batch of better-than-expected corporate results.

The Dow Jones industrial average, S&P 500 and the Nasdaq closed up between 0.5% and 0.6%. The Dow finished at its highest level since October 2007, while the S&P 500 closed above the 1,500 mark for the first time since December 2007.

All three indexes also logged their fourth consecutive week of gains, with the Dow climbing 1.8%, the S&P 500 rising 1.1% and the Nasdaq adding 0.5%.

An encouraging batch of earnings helped lift the market Friday.

Procter & Gamble (PG) shares rose 4%, leading the gains on the Dow. The company, which makes a variety of household goods, topped earnings expectations and raised its outlook for earnings and share repurchases in 2013. Microsoft (MSFT) and AT&T (T) shares also boosted the blue-chip index following their earnings.

Halliburton (HAL) shares jumped more than 5%, making it among the best performers in the S&P 500. The company reported earnings that beat analysts' expectations, driven by strength in the company's international divisions. A 4% increase in Starbucks (SBUX) shares also boosted the broader market. The company reported earnings late Thursday that were in line with analysts' estimates.

Netflix (NFLX) continued to surge for a second day. Shares gained more than 15% Friday, adding to the previous day's 42% jump. Earlier this week, Netflix shocked Wall Street with a surprise profit for the fourth quarter.

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But Apple (AAPL)shares continued to slide Friday, falling 2.3%. The sell-off briefly knocked Apple from its position as the world's most valuable company, allowing Exxon Mobil (XOM) to reclaim the title.

Also, on the downside, shares of Hasbro (HAS) were under pressure after the company said it expects full-year earnings to come in below analysts' expectations, citing the "challenging growth prospects" in the toy industry. Hasbro also announced it was cutting 10% of its workforce. Shares of rival Mattel (MAT) fell too.

Hasbro cutting jobs after weak holiday
Hasbro cutting jobs after weak holiday

Overall, S&P 500 companies are expected to report earnings growth of 4.45% for the last three months of 2012, according to S&P Capital IQ.

Of the 142 companies that had reported results as of Thursday evening, 66% have exceeded analysts' expectations.

On the economic front, new-home sales unexpectedly dropped in December, sliding 7.3% to an annual rate of 369,000, according to a report from the Census Bureau.

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Overseas, European markets ended higher, with the DAX in Germany adding more than 1.4%. London's FTSE 100 edged up, despite data showing the U.K. economy shrank 0.3% in the fourth quarter. The weaker-than-expected performance raised concerns that Britain could slide back into recession.

Asian markets ended mixed. Shares in Shanghai and Hong Kong fell sightly, but the Nikkei in Japan surged more than 2%. Japanese stocks have rallied as investors bet recent moves by the Bank of Japan and newly-elected prime minister Shinzo Abe will revive the nation's economy.

The dollar declined versus the euro and the British pound, but gained ground versus the Japanese yen.

Oil prices and gold prices slipped.

The price of the 10-year Treasury slipped, pushing the yield up to 1.95% from 1.84% from late Thursday.

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