Stocks cap strong week with mixed close

updated 4:47 p.m. ET July 17, 2009

NEW YORK - Investors are betting that a resurgent rally will continue.

Stocks ended little changed Friday but held onto an enormous rally for the week. Investors are looking to another flood of corporate earnings reports next week to provide more signs that the economy is healing.

The Dow Jones industrials and the Standard & Poor's 500 index posted their best weekly performance since the week ending March 13, when the market's spring rally began. All the major stock indexes rose about 7 percent for the week.

"We had a big run-up earlier in the week and I think people would just as soon go into the weekend without any major disruptions in their exposures," said Jeff Buetow, managing partner at Innealta Portfolio Advisors. "I think people want the market to go up."

Solid results from Goldman Sachs Group Inc. and Intel Corp. spurred buying early in the week. But not all the results Friday were strong, holding the market in place.

On Friday, Bank of America Corp. and Citigroup Inc. became the latest banks to report big profits but also weakness in their loan portfolios. General Electric Co. beat earnings forecasts, but its revenue came up short.

"The important thing is these earnings results, while not all entirely positive, are beginning to show some signs of stabilization," said Tom Kersting, an analyst at Edward Jones.

The Dow Jones industrials rose 32.12, or 0.4 percent, to 8,743.94. The broader Standard & Poor's 500 index slipped 0.36, or less than 0.1 percent, to 940.38, while the Nasdaq composite index rose 1.58, or 0.1 percent, to 1,886.61.

News moving the markets Housing construction hits a 7-month high GE’s second quarter earnings fall 49 percent Citigroup reports surprise profit Bank of America posts $2.4 billion profit Oil surges to settle above $63

The number of stocks that fell narrowly outpaced those that rose on the New York Stock Exchange, where trading volume came to 1.3 billion shares compared with 1.2 billion traded Thursday.

Financial stocks mostly fell, weighing on the broader market. Investors have been encouraged by strong profits from large banks, but there are still signs that the recession's grip hasn't eased as much as hoped, such as higher loan defaults.

BofA, which has struggled more than some of its peers from loan losses, beat Wall Street estimates just as Goldman Sachs and JPMorgan Chase & Co. did earlier in the week. However its profit fell from a year earlier as losses from delinquent loans continued to climb. BofA fell 28 cents, or 2.1 percent, to $12.89.

Citigroup, another troubled bank, surprised Wall Street with a $3 billion profit instead of the big loss analysts had expected, but results were boosted by the sale of a majority stake in its Smith Barney brokerage. Its shares fell a penny to $3.02.

One exception was CIT Group Inc., whose shares jumped 29 cents to 70 cents, on speculation that the troubled lender might be able to avoid bankruptcy. Its shares had tumbled 75 percent on Thursday after negotiations with federal regulators about a possible rescue fell through.

GE's shares dropped 6 percent after the conglomerate said its earnings fell 49 percent on losses at its financial unit and weakness in industrial businesses. The profits topped forecasts, but revenue came in $3 billion below estimates. The stock lost 75 cents to $11.65.

The reports followed mixed results from Google Inc. and IBM Corp. late Thursday.

Homebuilders' shares climbed after an upbeat reading on the housing market. Construction of new homes and apartments jumped 3.6 percent in June to the highest level in seven months, beating economists' estimates. Building permits climbed 8.7 percent, also beating forecasts.

Shares of Hovnanian Enterprises Inc. rose 8 cents, or 3.3 percent, to $2.53, while DR Horton Inc. rose 26 cents, or 2.7 percent, to $9.90.

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