Stocks advanced Friday, as blowout earnings from Google and a big corporate takeover overshadowed another warning about the US credit rating and a depressed reading on consumer sentiment.
The Dow Jones Industrial Average rose 42.61 points, or 0.3 percent, to 12,479.73. The blue-chip index bobbed between positive and negative territory much of the day before the late rise. Caterpillar led the industrials higher, rising $1.78, or 1.7 percent, to $109.36.
The Standard & Poor’s 500-stock index rose 7.27 points, or 0.6 percent, to 1,316.14. The energy sector was the biggest gainer, rising 2.3 percent, amid a rise in crude oil prices and some merger-and-acquisition activity.
Petrohawk Energy soared 63 percent after Australia’s BHP Billiton agreed to buy the company in a deal valued at more than $15 billion, including debt. Petrohawk soared $14.68, or 62 percent, to $38.17
The technology-oriented Nasdaq Composite Index rose 27.13 points, or one percent, to 2,789.80, fueled by Google’s upbeat quarterly report.
The internet-search giant late Thursday posted a surprisingly robust 36 percent jump in quarterly profit on record revenue. Google experienced strength in its core search business and gained traction with its newer operations, including its new social network Google+.
Investor optimism withstood a warning from Standard & Poor’s late Thursday on US debt. The credit rater said there is a 50-percent chance it would lower the AAA bond rating on US debt within three months.
The threat of a possible downgrade comes as the debate over raising the debt ceiling has lasted longer than expected.
House Republicans said Friday they planned to vote next week on a proposal to raise the debt ceiling by $2.4 trillion, with matching cuts and guidelines to control future government spending.
“The wall of worry is still there,” said Brian Gendreau, market strategist with Cetera Financial Group. “But M&A activity is reviving and earnings are providing a stealth source of support for the market.”
Financial stocks were among the worst decliners in the S&P 500. Citigroup slumped 1.9 percent, reversing an earlier advance. The bank’s second-quarter profit jumped 24 percent, but it struggled to increase earnings in many businesses around the world, which diminished investor appetite for the stock.
