Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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Wall Street advances after stream of economic data

NEW YORK (Reuters) - Stock index rose on Friday after a batch of positive economic data points, but gains were checked with the benchmark S&P index at five-year highs as investors looked for strong catalysts to push the market further upward.

Data showed Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand, while German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Another positive sign was U.S. economic data which showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

But wholesale inventories unexpectedly fell 0.1 percent in December as auto dealers and agricultural suppliers drew down their stocks.

The S&P 500 <.spx> has risen for five straight weeks and is up 6.3 percent for the year. Its advance was helped by legislators in Washington averting a series of automatic spending cuts and tax hikes earlier in the year, as well as better-than-expected corporate earnings and data that pointed to modest economic improvement but no immediate change in the Federal Reserve's stimulus plans.

The index, hovering near five-year highs, has found it tougher to climb in recent days as investors await strong trading incentives to drive it further upward.

"We are going to have this churn and this consolidation, which actually isn't a bad thing - it's actually good the market isn't being so volatile and is actually consolidating because it is building a base," said Ken Polcari, Director of the NYSE floor division at O'Neil Securities in New York.

"If it builds a base, from there it is easier to make the argument that you move ahead."

The Dow Jones industrial average <.dji> gained 67.62 points, or 0.48 percent, to 14,011.67. The Standard & Poor's 500 Index <.spx> climbed 7.82 points, or 0.52 percent, to 1,517.21. The Nasdaq Composite Index <.ixic> rose 27.34 points, or 0.86 percent, to 3,192.47.

McDonald's Corp said January sales at established hamburger restaurants around the world fell 1.9 percent, a steeper decline than analysts expected. Still, shares edged up 0.5 percent to $94.11.

Healthcare stocks were among the best performers, with the Morgan Stanley healthcare payor index <.hmo> up 2.3 percent. Molina Healthcare Inc surged 12.1 percent to $32.36 as the biggest boost to the index after posting fourth-quarter earnings.

LinkedIn Corp jumped 19.3 percent to $148.02 after announcing blow-out quarterly profits and a bullish forecast for the year that exceeded Wall Street's already lofty expectations.

According to Thomson Reuters data through Friday morning, of 339 companies in the S&P 500 that have reported earnings, 69.9 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies grew 5.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(Editing by Bernadette Baum)

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Wall Street extends losses as retail, housing stocks fall

NEW YORK (Reuters) - Wall Street extended losses on Thursday with housing and retail stocks leading the decline.

The Dow Jones industrial average <.dji> was down 101.72 points, or 0.73 percent, at 13,884.80. The Standard & Poor's 500 Index <.spx> was down 9.65 points, or 0.64 percent, at 1,502.47. The Nasdaq Composite Index <.ixic> was down 25.16 points, or 0.79 percent, at 3,143.32.

(Reporting By Angela Moon; Editing by Nick Zieminski)

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Wall Street slips after Tuesday rally, results eyed

NEW YORK (Reuters) - U.S. stocks dipped on Wednesday as investors, awaiting fresh trading incentives, locked in profits after recent rallies took the S&P 500 to five-year highs.

Transportation stocks were among the worst performers weighed down by an 8.2 percent drop in CH Robinson Worldwide , which dropped 8.2 percent to $61.53 after reporting fourth-quarter earnings.

The Dow Jones Transportation index <.djt> shed 0.6 percent after closing at an all-time high on Tuesday. The index has surged more than 10 percent this year so far.

A 6-percent advance this year so far has lifted the benchmark S&P 500 index to its highest since December 2007, while the Dow <.dji> briefly climbed above 14,000 recently, making it a challenge for investors to continue pushing the equity market upward in the absence of strong catalysts.

"You knew a correction was coming; the question was whether they were going to tease you and get it close and then start selling it off or get (the Dow) up to 14,000 and then start to make a move to the sell side," said Gordon Charlop, managing director at Rosenblatt Securities in New York.

"We got a quick move and it's really just not healthy for markets to go one way, so the idea that a little bit of a correction is due isn't troublesome to me at all."

Walt Disney Co was among the bright spots, up 1.4 percent to $55.07 after the company topped estimates for quarterly adjusted earnings and gave an optimistic outlook for the next few quarters.

According to Thomson Reuters data through Wednesday morning, of 301 companies in the S&P 500 <.spx> that have reported earnings, 68.1 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters. In terms of revenue, 65.8 percent of companies have topped forecasts.

Looking ahead, fourth-quarter earnings for S&P 500 companies are now expected to grow 4.7 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

The Dow Jones industrial average <.dji> lost 35.52 points, or 0.25 percent, at 13,943.78. The Standard & Poor's 500 Index <.spx> slipped 3.17 points, or 0.21 percent, at 1,508.12. The Nasdaq Composite Index <.ixic> shed 4.34 points, or 0.14 percent, at 3,167.24.

The benchmark S&P index rose 1.04 percent Tuesday, its biggest percentage gain since a 2.5-percent advance on January 2, when legislators sidestepped a "fiscal cliff" of spending cuts and tax hikes that could have hurt a fragile U.S. economic recovery.

Ralph Lauren Corp climbed 7.4 percent to $177.13 as the best performer on the S&P 500 after reporting renewed momentum in its holiday-quarter sales and profits.

Time Warner Inc jumped 4.3 percent to $52.11 after reporting higher fourth-quarter profit that beat Wall Street estimates, as growth in its cable networks offset declines in its film, TV entertainment and publishing units.

Visa , the world's largest credit and debit card network, is expected to report earnings per share of $1.79 for its first quarter, up from $1.49 a year earlier. Smaller rival MasterCard recently reported better-than-expected results but said its revenue growth could slow in the first half of the year due to economic uncertainty.

(Editing by Bernadette Baum)

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Wall Street rebounds from weakness, Dell to go private

NEW YORK (Reuters) -Stocks rose on Tuesday as investors sought bargains following the market's worst daily session since November and more companies reported results that were stronger than expected.

Major stock indexes had dropped about 1 percent in Monday's session, pressured by renewed worries over the euro zone's sovereign debt crisis. Still, equities have been strong performers recently, with the benchmark S&P 500 index up 4.9 percent for 2013.

Dell Inc agreed to go private in a $24.4 billion deal that was widely expected. Shares of the computer maker rose 0.7 percent to $13.36 after a brief trading halt.

Wall Street has advanced on strong fourth-quarter earnings and signs of improved economic growth, suggesting the market's longer-term trend remains higher.

"Stocks are really the only place investors can go for any kind of real return, and that's enough to have people continuing to come into the market, not just buying on dips but in general," said Thomas Nyheim, portfolio manager at Christiana Trust in Greenville, Delaware.

Archer Daniels Midland reported revenue and adjusted fourth-quarter earnings that beat expectations, boosted by strong global demand for oilseeds. Shares rose 4 percent to $29.58.

Estee Lauder Cos Inc gained 4.5 percent to $63.78 after reporting results.

According to Thomson Reuters data, of the 53 percent of S&P 500 companies that have reported earnings thus far, 69 percent have beaten profit expectations, over the 62 percent average since 1994 and the 65 percent average over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are expected to rise 4.5 percent, according to the data, above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent forecast on October 1.

The Dow Jones industrial average <.dji> was up 83.88 points, or 0.60 percent, at 13,963.96. The Standard & Poor's 500 Index <.spx> was up 9.16 points, or 0.61 percent, at 1,504.87. The Nasdaq Composite Index <.ixic> was up 10.80 points, or 0.35 percent, at 3,141.97.

At current levels, the S&P is less than 5 percent away from its all-time intraday high of 1,576.09, reached in October 2011.

McGraw-Hill extended its Monday decline, slumping 7.1 percent to $46.68 as the U.S. Justice Department launched a civil lawsuit against the company and its unit, Standard & Poor's, over mortgage bond ratings. The action marks the first such federal action against a credit rating agency related to the recent financial crisis.

The stock has dropped more than 20 percent over the past two days.

U.S. shares of BP Plc rose 1.8 percent to $44.38 after the company reported earnings that beat expectations and said underlying financial momentum would be "strongly evident" by 2014.

The Institute for Supply Management's non-manufacturing index was 55.2 in January, as expected and down slightly from the previous month.

(Editing by Kenneth Barry)

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Wall Street opens lower after recent gains

NEW YORK (Reuters) - U.S. stocks opened lower on Monday, dipping after a recent rally that took the S&P 500 to a five-year high and the Dow to 14,000 for the first time since October 2007.

The Dow Jones industrial average <.dji> was down 58.67 points, or 0.42 percent, at 13,951.12. The Standard & Poor's 500 Index <.spx> was down 6.84 points, or 0.45 percent, at 1,506.33. The Nasdaq Composite Index <.ixic> was down 18.33 points, or 0.58 percent, at 3,160.77.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)

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"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

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"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

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Dow hits 14,000 on strong data

NEW YORK (Reuters) - Stocks extended gains on Friday, with the Dow industrials trading above 14,000 for the first time since October 2007, as jobs and manufacturing data pointed to a stronger U.S. economy.

The Dow Jones industrial average <.dji> rose 133.89 points or 0.97 percent, to 13,994.47, the S&P 500 <.spx> gained 12.09 points or 0.81 percent, to 1,510.2 and the Nasdaq Composite <.ixic> added 24.44 points or 0.78 percent, to 3,166.58.

The Dow hit a session high of 14,000.97, a level not seen since October 17, 2007, up more than 1 percent on the day.

(Reporting by Rodrigo Campos; Editing by Bernadette Baum)

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Wall Street flat after mixed data; Qualcomm lifts Nasdaq

NEW YORK (Reuters) - Stocks were little changed on Thursday as investors mulled a mixed bag of economic data, though earnings from Qualcomm helped lift the Nasdaq.

Data showed the labor market improved modestly; the number of Americans filing new claims last week for unemployment benefits rose, beating expectations and bouncing off five-year lows in the prior week.

That comes ahead of Friday's payrolls report, which is expected to show employers added 160,000 jobs in January after an increase of 155,000 in December.

A separate report showed incomes climbed in December by the most in eight years, in an encouraging sign that the economy may be propelled forward through consumer spending.

A gauge of business activity in the U.S. Midwest showed a pick up in January from a more than three-year low in December as new orders jumped. The report followed a disappointing survey from the mid-Atlantic and New York regions.

Qualcomm Inc gained 5.9 percent to $67.25 as the top boost to the Nasdaq 100 <.ndx> after the world's leading supplier of chips for cellphones beat analysts' expectations for quarterly profit and revenue, and raised its targets for the year.

The worst performer on the Nasdaq was Facebook Inc , which lost 5.9 percent to $29.39. The social network company said Wednesday it doubled its mobile advertising revenue in the fourth quarter; however, that growth trailed some of Wall Street's most aggressive estimates.

The Dow Jones industrial average <.dji> gained 22.88 points, or 0.16 percent, to 13,933.30. The Standard & Poor's 500 Index <.spx> gained 0.21 points, or 0.01 percent, to 1,502.17. The Nasdaq Composite Index <.ixic> gained 8.43 points, or 0.27 percent, to 3,150.73.

The S&P 500 <.spx> has gained 5.3 percent in January, after legislators in Washington temporarily sidestepped a "fiscal cliff" of automatic tax increases and spending cuts that could have derailed the economic recovery, and amid improving economic data and better-than-expected corporate earnings.

But the benchmark index has stalled recently and is virtually flat for the week, hovering near the 1,500 mark, as investors look for fresh trading incentives to justify further gains.

"Unfortunately it's still a mixed picture, it appears we are just getting a lot of conflicting data right now," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

"There is certainly a lot of information coming out this week - a lot of economic data, a lot of earnings and of course we have the employment number looming Friday, so with 1,500 right here, my guess is there is just not enough conviction to push us substantially higher yet."

United Parcel Service Inc lost 1.6 percent to $79.95 after the world's largest parcel delivery reported fourth-quarter earnings below analysts' estimates on Thursday and forecast weaker-than-expected profit for 2013.

But the Dow Jones Transportation average <.djt> gained 0.5 percent as Kirby Corp added 7.6 percent to $71.57 and Ryder Systems Inc climbed 4.7 percent to $56.79 after posting quarterly results.

Thomson Reuters data through Thursday morning shows that of the 231 companies in the S&P 500 that have reported earnings this season, 69.3 percent have exceeded expectations, a higher proportion than over the past four quarters and above the average since 1994.

Overall, S&P 500 fourth-quarter earnings are forecast to have risen 3.7 percent. That's above a 1.9 percent forecast at the start of the earnings season, but well below a 9.9 percent profit growth forecast on October 1, the data showed.

WMS Industries Inc surged 52.5 percent to $24.96 after the company agreed to be acquired by Scientific Games Corp for $26 per share in cash. Scientific Games jumped 19 percent to $10.63.

(Editing by Bernadette Baum)

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Wall Street edges higher, Amazon offsets GDP

NEW YORK (Reuters) - Stocks were flat on Wednesday as an unexpectedly weak read on fourth-quarter economic activity was offset by strong results at Boeing and Amazon.com.

Equities continued to shrug off negative news, with the S&P 500 staying above 1,500, a level that market technicians call an inflection point that will determine the overall direction in the near term.

The first read showed gross domestic product fell 0.1 percent, far below expectations for growth of 1.1 percent. However, private sector employment topped forecasts, with the ADP National Employment report showing 192,000 jobs added in January, higher than the 165,000 expectation.

"The GDP report is the only negative shock we've had in a while, and it isn't terrible since it showed increases in business and consumer spending, which is what everyone wants to drive growth from here," said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.

Deeper losses were prevented by a rise in both Boeing Co and Amazon.com Inc , which rallied after earnings beat expectations, continuing a trend this quarter of high-profile names advancing after results.

Amazon.com Inc rose 6.7 percent to $277.87 a day after reporting strong revenue growth. Boeing rose 0.5 percent to $74 after its results. The Dow component also said that while production continued on its Dreamliner jet, which has had technical problems recently, it was suspending delivery until clearance was granted by the Federal Aviation Administration.

Thomson Reuters data showed that of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

The Dow Jones industrial average <.dji> was up 5.50 points, or 0.04 percent, at 13,959.92. The Standard & Poor's 500 Index <.spx> was up 1.09 points, or 0.07 percent, at 1,508.93. The Nasdaq Composite Index <.ixic> was up 5.73 points, or 0.18 percent, at 3,159.39.

The S&P 500 is on track to post its best monthly performance since October 2011 as investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record.

The Dow Jones industrial average has been flirting with 14,000, a level it hasn't seen since October 2007. Many analysts have said markets may need to take a pause.

"I'm neutral on markets at these levels, even though there aren't a lot of negatives out there," Frederick said. "At some point there will be a pullback, but the underlying trends remain strong and I think it is possible the S&P could hit a new all-time high sometime this quarter."

The all-time intraday high for the S&P 500 is 1,576.09, reached October 11, 2007.

The Federal Reserve concludes a two-day meeting on Wednesday, and while the central bank is expected to keep monetary policy on a steady path, intensive debates continue behind the scenes over when the controversial bond-buying program should be curtailed.

Chesapeake Energy Corp rose 11 percent to $21.11 as the S&P's biggest percentage gainer, a day after saying Aubrey McClendon would step down as chief executive after a year in which a series of Reuters investigations triggered civil and criminal probes of the second-largest U.S. natural gas producer.

(Editing by Chizu Nomiyama and Nick Zieminski)

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Wall Street flat, investors look for new catalyst

NEW YORK (Reuters) - Stocks were flat on Tuesday as investors looked for new reasons in economic data or earnings to extend a rally that pushed major averages near five-year highs.

Equities have been on a tear lately, with the S&P 500 recently climbing for eight straight sessions, extending its rise in January to 5.1 percent. The index hovered around 1,500, suggesting there was still support for a market that has been hovering around five-year highs.

"A move like this in one month is extraordinary, and keeping the gains going will depend on concrete news like earnings and data that show the economy is getting better," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "We haven't seen enough of that to make people jump in after the rally we've had."

The gains have largely come on a strong start to earnings season, though results were mixed on Tuesday with Pfizer Inc rising but Ford Motor Co dropping after its report.

Both companies reported profits that topped expectations, but Ford also forecast a wider loss in its European segment. Shares dropped 3.6 percent to $13.32 as one of the biggest percentage losers on the S&P 500.

Pfizer, a Dow component, rose 1.2 percent to $27.16 after its results while Eli Lilly and Co rose 1.2 percent to $53.25 after reporting adjusted fourth-quarter earnings and revenue that beat expectations.

In economic news, stocks retreated slightly after data showed U.S. consumer confidence dropped to its lowest level in more than a year in January. Americans were more pessimistic about the economic outlook and their financial prospects, according to the Conference Board.

In addition, home prices rose 0.6 percent in November, as expected, according to the S&P Case/Shiller Home Price Index. The news comes a day after data showed an unexpected drop in December pending home sales.

Thomson Reuters data showed that of the 150 companies in the S&P 500 that have reported earnings so far, 67.3 percent have beaten analysts' expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

The Dow Jones industrial average <.dji> was up 13.40 points, or 0.10 percent, at 13,895.33. The Standard & Poor's 500 Index <.spx> was down 1.01 points, or 0.07 percent, at 1,499.17. The Nasdaq Composite Index <.ixic> was down 18.21 points, or 0.58 percent, at 3,136.09.

The Nasdaq was pressured by a pair of disappointing tech outlooks. Seagate Technology Plc forecast third-quarter revenue below expectations while BMC Software Inc gave a 2013 profit view that was below forecasts.

Seagate shares slumped 8.7 percent to $34.10 while BMC fell 7.8 percent to $41.

On the upside in technology, Yahoo Inc rose 1.2 percent to $20.55 a day after forecasting a rise in annual revenue.

The Federal Reserve's Open Market Committee is due to hold two days of meetings on interest rates beginning on Tuesday.

In a sign of an improved view towards equities, investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record, research provider TrimTabs Investment Research said.

(Editing by Kenneth Barry and Nick Zieminski)

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Wall Street flat after rally, Caterpillar advances

NEW YORK (Reuters) - U.S. stocks were flat on Monday, with investors reluctant to make big bets following an extended equity rally, though strong data and results from Caterpillar kept a positive tone in markets.

The S&P 500 is coming off a streak of eight sessions of gains, the longest winning streak for the index in eight years. On Friday, it closed above 1,500 for the first time in more than five years.

Caterpillar Inc rose 1.8 percent to $97.24 after the Dow component reported adjusted fourth-quarter earnings that beat expectations, though revenue was slightly below forecasts. The heavy machinery maker also said it expects China's economy to improve, though not at the rates of 2010 and 2011.

The results continued the trend of major firms posting strong quarters, contributing to major averages rising for four straight weeks.

"You can't find more of a global bellwether than Cat, and people are pleased with the number, which suggests there could be less concern about slowing growth in China after this," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

Thomson Reuters data through Friday showed that of the 147 S&P 500 companies that have reported earnings so far, 68 percent exceeded expectations. Since 1994, 62 percent of companies have topped expectations, while the average over the past four quarters stands at 65 percent.

The Dow Jones industrial average <.dji> was up 18.07 points, or 0.13 percent, at 13,914.05. The Standard & Poor's 500 Index <.spx> was down 0.07 points, or 0.00 percent, at 1,502.89. The Nasdaq Composite Index <.ixic> was up 7.25 points, or 0.23 percent, at 3,156.97.

The S&P 500 on Friday closed at its highest since December 10, 2007, and the Dow ended at its highest since October 31, 2007. Over the past four weeks, the S&P has jumped 7.2 percent, suggesting markets may be vulnerable to a pullback if news disappoints.

Durable goods jumped 4.6 percent in December, a pace that far outstripped expectations for a rise of 1.8 percent.

"We continue to have a parade of better-than-expected economic reports. All-in-all it's a good picture. I think there's a good chance we've reached a point of recognition where people don't think the economy will crater," Kaufman said.

In addition to earnings, equities have also risen on an agreement in Washington to extend the government's borrowing power. On Monday, Fitch Ratings said that agreement removed the near-term risk to the country's 'AAA' rating.

Previously, the agency said the lack of an agreement would prompt a review of the sovereign rating.

In company news, Keryx Biopharmaceuticals Inc said a late-stage trial of its experimental kidney disease drug met the main study goal of reducing phosphate levels in blood, sending shares up 43 percent to $4.91.

Bargain hunters may look to Apple Inc in the first session after the tech giant lost its coveted title as the largest U.S. company by market capitalization to Exxon Mobil Corp . Apple rose 0.7 percent to $443.06.

On Friday, Apple's market cap fell to $413 billion, down roughly $250 billion from its September peak. Apple's fall is about equal to the entire value of Google Inc .

"Apple is pretty attractive right now, so you may see an opportunity here," said Chris Bertelsen, who helps oversee $1.5 billion as chief investment officer of Global Financial Private Capital in Sarasota, Florida. "Those who think the stock is dead have made a big mistake."

(Editing by W Simon, Kenneth Barry and Nick Zieminski)

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Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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S&P 500 eyes best winning streak in eight years

NEW YORK (Reuters) - Stocks rose on Friday, buoyed by sturdy corporate earnings from Procter & Gamble and Honeywell, with the S&P 500 poised for its longest winning streak in more than eight years.

The strong start for the equity market this year has been attributed to solid corporate results, agreement in Washington to extend the government's borrowing power, encouraging signs from the global economy and seasonal inflows into stocks.

Those factors helped the S&P 500 rally for a seventh day on Thursday to a five-year peak. Still, the index struggled to climb convincingly above 1,500, a level it surpassed briefly Thursday for the first time since December 2007.

If the S&P 500 rises for an eighth day on Friday it will be its longest winning streak since late 2004, when it rallied for nine straight days.

"We are seeing a very broad-based rally and the ingredients are still in place," said Steve Goldman, principal at Goldman Management in Short Hills, New Jersey. "This is the lift-off phase and it's still significant."

Procter & Gamble , the world's top household products maker, said quarterly profit soared past expectations and raised its sales and earnings outlook for the fiscal year. Shares rose 3.5 pct to $72.93.

The Dow Jones industrial average <.dji> gained 27.45 points, or 0.20 percent, to 13,852.78. The Standard & Poor's 500 Index <.spx> rose 4.19 points, or 0.28 percent, to 1,499.01. The Nasdaq Composite Index <.ixic> added 8.63 points, or 0.28 percent, to 3,139.01.

Honeywell International Inc posted fourth-quarter earnings just above Wall Street estimates, reflecting the diversified U.S. manufacturer's campaign to boost profit margins in the face of sluggish sales growth. The shares rose 0.9 percent to $68.82.

Pointing to a rotation out of bonds, U.S. 30-year Treasury bonds traded more than a point lower in price on Friday, with yields touching session highs at 3.10 percent.

"You have had more confidence from fund managers to provide more allocations to equity markets," which looked more attractive than bonds or cash, said Rick Meckler, president of investment firm LibertyView Capital Management.

Recent company earnings have been encouraging. Thomson Reuters data through early Thursday showed that of the 133 S&P 500 companies that have reported earnings so far, 66.9 percent exceeded expectations, more than the 65 percent average over the past four quarters.

Microsoft Corp reported lower quarterly profit on Thursday as Office software sales slowed ahead of a new launch, offsetting a solid but unspectacular start for its Windows 8 operating system and sending the company's shares down 0.2 percent to $27.51.

Apple stepped up audits of working conditions at major suppliers last year, discovering multiple cases of underage workers, discrimination and wage problems. The shares, which fell 12 percent Thursday after disappointing earnings, were little changed at around $450.93.

German business morale improved for a third consecutive month in January to its highest in more than half a year, providing further evidence that growth in Europe's largest economy was gathering speed after contracting late last year.

Echoing a more positive tone in Europe, ECB President Mario Draghi said on Friday he expects the euro zone economy to recover later this year, and that financial market improvements had not yet trickled into the general economy.

(Editing by Bernadette Baum)

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Wall Street gains for seventh day, despite Apple

NEW YORK (Reuters) - The S&P 500 surged through 1,500 on its seventh day of gains, underpinned by positive economic news, even as Apple shares slid nearly 11 percent following a revenue miss.

Apple Inc missed Wall Street's revenue forecast for a third straight quarter as iPhone sales were poorer than expected, fanning fears its dominance of consumer electronics is slipping. The shares dropped 10.9 percent to $457.94, wiping out about $50 billion of its market value.

Positive economic reports helped reverse the market's earlier declines. The number of Americans filing new claims for unemployment benefits unexpectedly fell to a five-year low, and factory activity in January neared a two-year high. It was the first time the S&P 500 had risen above 1,500 since December 12, 2007.

The domestic data chimed with those overseas showing growth in Chinese manufacturing accelerated to a two-year high this month and a buoyant Germany took the euro zone economy a step closer to recovery.

With signs the economy is improving, some investors are lauding the strength of the stock market as it shrugs off a significant slide in shares of Apple, the world's biggest company.

"The market has disconnected itself with Apple," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire. "I think it shows great strength in the overall S&P."

The Dow Jones industrial average gained 76.46 points, or 0.55 percent, to 13,855.79. The Standard & Poor's 500 Index rose 5.52 points, or 0.37 percent, to 1,500.33. The Nasdaq Composite Index dropped 7.67 points, or 0.24 percent, to 3,146.00.

Apple's disappointing results drew a round of price-target cuts from brokerages. At least 14 brokerages, including Barclays Capital, Credit Suisse and Deutsche Bank, cut their price target on the stock by $142 on average. Morgan Stanley removed the stock from its 'best ideas' list.

Netflix Inc surprised Wall Street Wednesday with a quarterly profit after the video subscription service added nearly 4 million customers in the U.S. and abroad. Shares jumped nearly 40 percent.

Diversified U.S. manufacturer 3M Co reported a 3.9 percent rise in profit, meeting expectations, on solid growth in sales of its wide array of products, which range from Post-It notes to films used in television screens. The shares shed 0.6 percent.

Corporate earnings have helped drive the recent stock market rally. Thomson Reuters data through early Thursday showed that of the 133 S&P 500 companies that have reported earnings, 66.9 percent have exceeded expectations, above the 65 percent average over the past four quarters.

Investors in U.S.-based mutual funds pumped $9.32 billion into stock funds in the week ended January 16, the second consecutive week of inflows for such funds, data from the Investment Company Institute showed Wednesday.

Removing an element of political uncertainty from markets, the U.S. House of Representatives on Wednesday passed a Republican plan to allow the federal government to keep borrowing money through mid-May, clearing it for fast enactment after the top Senate Democrat and White House endorsed it.

(Editing by Bernadette Baum)

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IBM's outlook lifts Dow, Nasdaq amid tech rally

NEW YORK (Reuters) - Stocks edged higher on Wednesday as IBM and other tech companies continued a trend of results that beat Wall Street's expectations and propelled the market to a five-day advance.

Internet search company Google Inc added to the advance, rising 5.1 percent to $738.65 a day after Google reported its core business outpaced expectations. Revenue was also higher than expected.

International Business Machines Corp late Tuesday forecast better-than-anticipated 2013 results and also posted fourth-quarter earnings and revenue that beat expectations. The results helped to allay concerns about the tech sector after Intel Corp gave a weak outlook last week. IBM, the world's largest technology services company, rose 3.8 percent to $203.57.

"Tech companies are really shattering expectations, which is obviously helping markets. There doesn't seem to be an end to this rally," said Todd Schoenberger, managing partner at LandColt Capital in New York.

But gains were limited in the S&P 500 a day after it closed at a level not seen since December 2007. Many investors were also holding off to see earnings from Apple Inc , the most valuable U.S. company which was due to report after the market closes.

McDonald's edged higher 0.2 percent to $93.11 after reporting a rise in fourth-quarter earnings, lifted by an increase in same-store sales. United Tech's earnings fell from the prior year, hurt by large restructuring charges. Shares edged up at $87.91.

On the downside, Coach Inc slumped 15 percent to $51.40 as the S&P's biggest percentage loser after reporting sales that missed expectations.

After the market closes, investors will scour Apple's results for signs the tech giant can continue to grow at an accelerated pace. The stock has been pressured recently by questions raised about demand for Apple's prospects. The stock has fallen 5 percent since the start of the year, compared with gains of 4.6 percent in the S&P 500. It rose 0.4 percent to $507.04 on Wednesday.

"If Apple comes out with a blockbuster number, that would reinforce the argument that stocks are poised to do well in the first part of 2013," Schoenberger said.

The Dow Jones industrial average <.dji> was up 55.48 points, or 0.40 percent, at 13,767.69. The Standard & Poor's 500 Index <.spx> was up 0.06 points, or 0.00 percent, at 1,492.62. The Nasdaq Composite Index <.ixic> was up 10.89 points, or 0.35 percent, at 3,154.06.

Both the S&P 500 and Dow Jones industrial average hit five-year closing highs on Tuesday, with recent gains largely fueled by a strong start to the earning season.

According to the latest Thomson Reuters data, of the 74 S&P 500 companies that have reported earnings so far, 62.2 percent have topped expectations, roughly even with the 62 percent average since 1994, but below the 65 percent average over the past four quarters.

Overall, S&P 500 fourth-quarter earnings rose 2.6 percent, according to Thomson Reuters data. That estimate is above the 1.9 percent forecast from the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast from October 1, the data showed.

Republican leaders in the U.S. House of Representatives aim on Wednesday to pass a bill to extend the U.S. debt limit by nearly four months, to May 19. The White House welcomed the move, saying it would remove uncertainty about the issue.

The debt limit issue has hung over the market for weeks, with many investors worried that if no deal is reached to raise the limit, it could have a negative impact on the economy.

(Editing by W Simon and Kenneth Barry)

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Wall Street flat near five-year highs, Travelers rallies

NEW YORK (Reuters) - U.S. stocks were little changed near five-year highs on Tuesday as investors held back from making large bets ahead of earnings from key tech companies.

Both the Dow and S&P 500 closed at their highest levels so far in this earnings season, with the gains largely coming on better-than-expected results. But despite bullish statements from major companies, many investors are worried economic uncertainty in the fourth quarter hurt earnings and revenues.

Weaker-than-expected economic data had little impact on stocks. Existing-home sales unexpectedly fell in December, dropping 1 percent, according to the National Association of Realtors. Analysts were looking for a rise of 1.2 percent.

Recently Apple Inc and Intel Corp gave weak outlooks, calling the tech sector' outlook into question. Three tech companies are due to report after the market's close: Google Inc, International Business Machines and Texas Instruments.

"Markets are quiet today with many investors taking a wait-and-see approach to tonight's tech earnings," said Douglas DePietro, managing director at Evercore Partners in New York. "There's still room for us to rise from here, but right now most of the action is in specific stocks."

Four Dow components reported early on Tuesday, and three rose on the results. Insurer Travelers Cos was the stand-out, climbing 3.4 percent to $78.90 as the S&P 500's biggest percentage gainer after it forecast higher premiums across its business.

DuPont, the largest U.S. chemical company by market capitalization, reported revenue that was ahead of Wall Street expectations, while Verizon Communications Inc also posted revenue that beat forecasts.

Shares of DuPont were up 0.6 percent at $47.24 while Verizon rose 0.3 percent to $42.67.

On the downside, Johnson & Johnson, the diversified health company, fell 0.5 percent to $72.87 after forecasting 2013 earnings below expectations.

The Dow Jones industrial average was down 6.07 points, or 0.04 percent, at 13,643.63. The Standard & Poor's 500 Index was down 1.56 points, or 0.10 percent, at 1,484.42. The Nasdaq Composite Index was down 2.52 points, or 0.08 percent, at 3,132.19.

Monday was a market holiday for Martin Luther King Jr. Day in the United States. President Barack Obama at his inauguration for a second term on Monday called for aggressive action on climate change, economic equality and the federal budget.

Markets have recently been pressured by uncertainty stemming from Washington about the federal debt limit and spending cuts that could hamper U.S. growth.

Republican leaders in the House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the U.S. debt limit, allowing the government to borrow enough to meet its obligations during that period.

Overall, S&P 500 fourth-quarter earnings rose 2.5 percent, according to Thomson Reuters data.

U.S. shares of Research in Motion jumped 8.2 percent to $17.13 a day after its chief executive said the company may consider strategic alliances with other companies after the launch of devices powered by RIM's new BlackBerry 10 operating system.

(Editing by Chizu Nomiyama and Kenneth Barry)

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