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Stocks inch higher as market closes losing week
Stocks inch higher on strong earnings from Google and Citi; indexes head for weekly loss
By The Associated Press

A slight gain in the stock market Friday helped investors avoid their worst weekly losses in nearly a year.

Investors seemed to ignore the ongoing debate about the debt limit in Washington. But big questions about Europe's financial health and manufacturing in the U.S. again overwhelmed strong earnings from a corporate bellwether.

Google Inc. jumped nearly 13 percent, the most of any stock in the Standard and Poor's 500 index, after the company said that its revenue last quarter hit an all-time high. The company's earnings pushed tech stocks in the S&P index broadly higher. Microsoft Corp. and Cisco Systems Inc. each gained nearly 1 percent.



But concerns about Europe and a weak data on U.S. factory output continued to weigh on stocks, as they have since early this spring. Those worries have kept traders' expectations and stock prices relatively low, said Ryan Detrick, senior technical strategist Schaeffer's Investment Research. If corporate earnings remain strong and Europe stabilizes, he said, stocks might rally in the second half of the year. That happened last year, after fears about Europe held the stock market back all summer.

"With all the talk about European debt and the U.S. issues, the fact that earnings are coming in pretty strong is a good sign," Detrick said. "Once those issues work their way through the system, long-term growth is going to come from earnings."

Most investors believe a deal to raise the country's debt ceiling will be reached before the Aug. 2 deadline. Credit rating agency Standard & Poor's said Thursday there is a 50 percent chance it will downgrade the government's credit rating within three months because of the impasse. And on Wednesday, Moody's Investor Service said it is reviewing America's bond rating for a possible downgrade. Even so, there has been little visible progress in negotiations between President Barack Obama and Congressional Republicans.

The Standard and Poor's 500 stock index inched up less than a point to 1,309 in afternoon trading. The Dow Jones industrial average fell 15, or 0.1 percent, to 12,421. The Nasdaq composite gained 12, or 0.4 percent, to 2,774.

The S&P index has lost 2.6 percent for the week, its worst performance since a 3.7 percent drop last August. Indexes have fallen four of the past five days after Italy appeared to be the next European country headed for a fiscal calamity.

Those concerns ebbed after Europe's banking authority said only eight banks failed the latest round of tests designed to show how well they would stand up under severe financial strain. A total of 90 banks were subject to the tests.

Energy stocks rose nearly 2 percent after Australian natural-resource giant BHP Billiton Ltd. said it would buy Petrohawk Energy Corp. for $12.1 billion, feeding speculation about which company might be the next takeover target. BHP was attracted to the long-term value of Petrohawk's U.S. natural gas reserves. Chevron Corp. gained 1.2 percent, the most of the 30 stocks that make up the Dow.

Among U.S. companies, Mattel shares rose 2 percent after the company said its net income jumped 56 percent in the second quarter, helped by strong demand for Barbie and "Cars 2" toys. Clorox Co. shares jumped 9 percent after billionaire investor Carl Icahn offered to take the company private in a deal that values the household products company at $10.2 billion. He offered 12 percent more for shares than they were worth at Thursday's close. And Bank of America fell below $10 a share for the first time since May 2009. The company, which is expected to report Tuesday that it lost money in its most recent quarter, dipped 0.8 percent to $9.99


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