Wall Street edges up; Dow and S&P near records

NEW YORK (Reuters) - Stocks rose modestly on low volume on Thursday after strong economic data, but the proximity of record highs for the Dow and the S&P 500 gave investors a reason to keep gains in check.

The U.S. economy grew slightly in the fourth quarter, reversing an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a string of data that suggests the economy improved early this year.

Still, an even higher revision to GDP data was expected, and the jobless claims extended a trend baked into stock prices.

The low volume shows a lack of conviction from new buyers, according to Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

Polcari the recent gains are the reaction to Monday's selloff, but there are not enough catalysts to take indexes much higher.

"Don't expect the market to hit new highs today," he said.

In afternoon trading, just over 3 billion shares had changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT.

The Dow was within striking distance of its record high after a year-to-date advance of almost 8 percent. The Dow Jones Transportation Average <.djt>, seen as a bet on future growth, is up 13 percent this year, and the 20-stock index hit a record intraday high earlier on Thursday.

The Dow Jones industrial average <.dji> rose 61.32 points or 0.44 percent to 14,136.69. The S&P 500 <.spx> gained 8.03 points or 0.53 percent to 1,524.02. The Nasdaq Composite <.ixic> added 17.14 points or 0.55 percent, to 3,179.67.

The Dow's record closing high, set on October 9, 2007, stands at 14,164.53, while the Dow's intraday record high, set on October 11, 2007, stands at 14,198.10.

The S&P 500 is up 0.25 percent this week and is on track to post its fourth straight month of gains.

Equity markets suffered steep losses earlier in the week on concerns about the impact of an Italian election on the European economy, but stocks bounced back on strong data and recent comments by Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed's economic stimulus policy.

Gains in Limited Brands and Netflix , both up nearly 4 percent, led the way among consumer stocks. Shares of Limited Brands, the parent of retailers Victoria's Secret and Bath & Body Works, shot up 3.8 percent to $46.21. The stock of video streaming service Netflix jumped 3.8 percent to $191.24.

In contrast, shares of J.C. Penney , however, slid 14.9 percent to $18.01 after the department store operator reported a steep drop in sales on Wednesday. Groupon Inc also fell on weak revenue, with the daily deals company's stock off 19.2 percent at $4.83.

Cablevision shares tumbled 8.8 percent to $14.11 after the cable provider took a $100 million hit on costs related to Superstorm Sandy and posted deeper video customer losses than expected.

On a positive note, Mylan Inc shares were on track to close at their highest ever after the generic drugmaker posted a 25 percent rise in fourth-quarter profit and said it will buy a unit of India's Strides Arcolab Ltd. Mylan's stock gained 4.2 percent to $29.78.

Investors were keeping an eye on the debate in Washington over U.S. government budget cuts that will take effect starting Friday if lawmakers fail to reach agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged last-ditch talks to prevent the cuts, but expectations were low that any deal would emerge.

With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent have beaten profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(The story corrects to show S&P up 0.25 pct this week, not 2 percent, in paragraph 11.)

(Reporting by Rodrigo Campos; Additional reporting by Ryan Vlastelica; Editing by Nick Zieminski and Jan Paschal)

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Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.

Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.

Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.

"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.

Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.

But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.

National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.

"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

OPTIONS BULLS TARGET GAINS

The spending cuts, if they go ahead, could hit the defense industry particularly hard.

Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.

Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.

"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.

The stock ended up 0.6 percent at $88.12 on Friday.

If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.

General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.

EYES ON GDP DATA, APPLE

The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.

U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.

Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.

Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.

On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.

(Additional reporting by Doris Frankel; Editing by Kenneth Barry)

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HP lifts Wall Street, S&P on pace for first weekly loss of year

NEW YORK (Reuters) - Stocks rose on Friday, rebounding off two days of losses as Dow component Hewlett-Packard surged on strong results, but the S&P 500 was on track to end a seven-week-long streak of gains.

The S&P shed 1.9 percent over the previous two sessions, its worst two-day drop since early November, putting the index on pace for its first weekly decline of the year. The retreat was triggered when the Federal Reserve's meeting minutes for January suggested stimulus measures may be halted sooner than thought.

Still, the index is up nearly 6 percent for the year and held the 1,500 support level despite the recent declines, a sign of a positive bias in the market.

"The market is addicted to Fed stimulus and gets withdrawal shakes every time that's threatened, but now we're resuming our course and remain much more attractively valued than other asset classes," said Rex Macey, chief investment officer at Wilmington Trust in Atlanta, Georgia.

Hewlett-Packard Co jumped 9.6 percent to $18.74 as the top boost on both the Dow and S&P 500 after the PC maker's quarterly revenue and forecasts beat expectations. The company cut costs under Chief Executive Meg Whitman's turnaround plan. The S&P technology sector <.splrct> was up 0.8 percent.

The Dow Jones industrial average <.dji> was up 69.41 points, or 0.50 percent, at 13,950.03. The Standard & Poor's 500 Index <.spx> was up 7.74 points, or 0.52 percent, at 1,510.16. The Nasdaq Composite Index <.ixic> was up 18.26 points, or 0.58 percent, at 3,149.75.

For the week, the Dow is off 0.2 percent in its third straight week of slight losses, the S&P is off 0.6 percent and the Nasdaq is off 1.3 percent.

Also buoying tech stocks were gains in semiconductor companies after Marvell Technology Group Ltd forecast results this quarter that were largely above analysts' expectations. Marvell gained market share in the hard-disk drive and flash-storage businesses. The stock rose 2.5 percent to $9.71.

In addition, Texas Instruments Inc raised its dividend by a third and boosted its stock buyback program, lifting shares 5.1 percent to $34.16 while the PHLX semiconductor index <.sox> gained 1.8 percent.

"Dividends growing are another way the market's level is justified, if not especially attractive at these levels," said Macey, who manages about $20 billion in assets.

On the downside, Abercrombie & Fitch dropped 7.6 percent to $45.34 after the clothing retailer reported a drop in fourth-quarter comparable sales, even as its latest quarterly earnings topped estimates.

Insurer American International Group Inc posted fourth-quarter results that beat analysts' expectations. Shares advanced 3 percent to $38.43.

According to Thomson Reuters data through Friday morning, of 439 companies in the S&P 500 that have reported results, 70 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(Editing by Kenneth Barry)

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Wall Street extends losses; Nasdaq off one percent

DEAR ABBY: My boyfriend, "Doug" (24), and I (22) have been in a long-distance relationship for a year, but we were friends for a couple of years before that. I had never had a serious relationship before and lacked experience. Doug has not only been in two other long-term relationships, but has had sex with more than 15 women. One of them is an amateur porn actress.I knew about this, but it didn't bother me until recently. Doug had a party, and while he was drunk he told one of his buddies -- in front of me -- that he should watch a certain porn film starring his ex-girlfriend. ...

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M&A deals lift shares, suggest value in market

NEW YORK (Reuters) - U.S. stocks rose on Tuesday as this year's ongoing surge of merger activity suggested investors were still finding value in the market even as indexes hover near five-year highs.

Office Depot Inc surged 12.4 percent to $5.15 after a person familiar with the matter said the No. 2 U.S. office supply retailer was in advanced talks to merge with smaller rival OfficeMax Inc , which jumped 22 percent.

News of the potential move came just days after Berkshire Hathaway and a partner agreed to acquire H.J. Heinz Co for $23 billion, and a revised $20 billion takeover of Mexican brewer Grupo Modelo by Anheuser-Busch InBev .

Deal activity has helped equities resist a pullback as investors use dips in stocks as buying opportunities. The S&P is up about 7 percent so far in 2013 and has climbed for the past seven weeks in its longest weekly winning streak since January 2011, though most of the weekly gains have been slim.

"Deals are good for the market," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "The fact that they're being done is a positive."

More than $158 billion in deals has been announced so far in 2013, more than double the activity in the same period last year and accounting for 57 percent of global deal volumes, according to Thomson Reuters Deals Intelligence.

The Dow Jones industrial average <.dji> gained 54.19 points, or 0.39 percent, to 14,035.95. The Standard & Poor's 500 Index <.spx> gained 9.66 points, or 0.64 percent, to 1,529.45. The Nasdaq Composite Index <.ixic> gained 13.53 points, or 0.42 percent, to 3,205.56.

Other stocks in the office supplies sector also rose. Larger rival Staples Inc shot up 12.9 percent to $14.61 as the best performer on the S&P 500.

"Equity investors have to be encouraged by M&A since, if the number crunchers are offering large premiums, that shows how much value is still in the market," said Mike Gibbs, co-head of the equity advisory group at Raymond James in Memphis, Tennessee.

On the downside, health insurance stocks tumbled, led by a 6.4 percent drop in Humana Inc to $72.99 after the company said the government's proposed 2014 payment rates for Medicare Advantage participants were lower than expected and would hurt its profit outlook.

UnitedHealth Group lost 1.9 percent to $56.25. The Morgan Stanley healthcare payor index <.hmo> dropped 1.6 percent.

Wall Street's strong start to the year for was fueled by better-than-expected corporate earnings, as well as a compromise by legislators in Washington that temporarily averted automatic spending cuts and tax hikes that are predicted to damage the economy.

The compromise on across-the-board spending cuts postponed the matter until March 1, at which point the cuts take effect. Ahead of the debate over the cuts, known as sequestration, further gains for stocks may be difficult to come by.

"If there's no major contention with sequestration, it looks like stocks are prepared to handle it, but until then we'll probably stay in a consolidation period marked by sideways trading with a slow rate of ascent," said Gibbs.

Economic data showed the NAHB/Wells Fargo Housing Market index unexpectedly edged down to 46 in February from 47 in the prior month as builders faced higher material costs.

According to the Thomson Reuters data through Monday morning, of the 391 companies in the S&P 500 that have reported results, 70.1 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies have risen 5.6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Express Scripts rose 1.7 percent to $56.49 after the pharmacy benefits manager posted fourth-quarter earnings.

(Additional reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama, Kenneth Barry and Nick Zieminski)

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Yen resumes fall after G20, U.S. holiday thins trade

LONDON (Reuters) - The yen resumed falling on Monday after Japan signaled it would push ahead with expansionist monetary policies having escaped criticism from the world's 20 biggest economies at the weekend.

Industrial metals also dipped and European shares were soft on lingering worries about the economic outlook, especially for the euro zone. While the risk of an inconclusive outcome in Italy's forthcoming election added to investor concerns.

However, activity was curtailed by the closure of markets in the United States for the Presidents' Day holiday.

The yen, which has dropped 20 percent against the dollar since mid-November, fell further after financial leaders from the G20 promised not to devalue their currencies to boost exports and avoided singling out Japan for any direct criticism.

The dollar rose 0.5 percent to 93.95 yen, near a 33-month peak of 94.47 yen set a week ago. The euro added 0.3 percent to 125.40 yen, to be midway between Friday's two-week low of 122.90 and a 34-month high of 127.71 yen hit earlier this month.

Strategists said the yen was likely to stay weak, though its decline could lose momentum until it becomes clear who will be taking the helm at the Bank of Japan when the current governor steps down on March 19.

"The yen probably will weaken a little further in anticipation of more aggressive easing under a new leadership team at the Bank of Japan," said Julian Jessop, chief global economist at Capital Economics.

Japan's Prime Minister Shinzo Abe is poised to nominate the new governor in the next few days. Sources have told Reuters that former financial bureaucrat Toshiro Muto, considered likely to be less radical than other candidates, was leading the field.

Meanwhile the euro dipped slightly against the dollar when European Central Bank president Mario Draghi said the currency's recent gains made any rise in inflation less likely and added that he had yet to see any improvement in the euro zone economy.

Speaking before the European Parliament, Draghi said the euro's exchange rate was not a policy target but was important for growth and stability, adding that appreciation of the euro "is a risk".

The comments left the euro down 0.2 percent at $1.3334.

Elsewhere in the currency market, sterling hit a seven-month low against the dollar, after a key policymaker made comments about the need for further weakness and recent poor data which has kept alive worries of another British recession.

Sterling fell 0.25 percent to $1.5476 having earlier touched $1.5438, its lowest since July 13.

DATA LOOMS

A big week for data on the outlook for the world's economy weighed on other riskier asset markets following the recent dire fourth-quarter growth numbers for the euro zone and Japan, along with Friday's soft U.S. manufacturing figures.

In European markets, attention is focused on the euro area Purchasing Managers' Indexes for February and German sentiment indices due later in the week which could affect hopes for a recovery this year.

Analysts expect Thursday's euro area flash PMI indices, which offer pointers to economic activity around six months out, to show growth stabilizing across the recession-hit region, leaving intact hopes for a recovery in the second half of 2013.

Concerns over an inconclusive outcome in the Italian election on Sunday and Monday have added to the weaker sentiment as a fragmented parliament could hamper a future government's efforts to reform the struggling economy.

The worries about the outlook for Italy were encouraging investors back into safe-haven German government bonds on Monday, with 10-year Bund yields easing 3.5 basis points to be around 1.63 percent.

"Political uncertainty will keep Bunds well bid this week," ING rate strategist Alessandro Giansanti said, adding that only better than expected economic data could create selling pressure on German debt in the near term.

Italian 10-year yields were 4 basis points higher on the day at 4.41 percent.

EARNINGS HIT

European equity markets were taking their lead from corporate earnings reports which have been reflecting the sluggish economic conditions across the region.

Danish brewer Carlsberg , which generates just over 60 percent of its sales in western Europe, became the latest to report a weaker-than-expected quarterly profit, sending its shares to their lowest level in almost a month.

The 5.8-percent drop for shares in the world's fourth biggest brewery helped send the FTSEurofirst 300 index <.fteu3> of top European shares down 0.2 percent. Germany's DAX <.gdaxi>, France's CAC-40 <.fchi> and Britain's FTSE-100 <.ftse> ranged between 0.4 percent up and 0.15 percent lower.

Earlier, the G20 statement and subsequent comment from Prime Minster Abe indicating a renewed drive to stimulate the Japanese economy lifted the Nikkei stock index <.n225> by 2.1 percent, near to its highest level since September 2008.

MSCI's world equity index <.miwd00000pus> was flat as markets extended a two-week period of consolidation that has followed the big run-up in January, when demand was buoyed by the efforts of central banks to stimulate the world economy.

Data from EPFR Global, a U.S.-based firm that tracks the flows and allocations of funds globally, shows investors pulled $3.62 billion from U.S. stock funds in the latest week, the most in 10 weeks after taking a neutral stance the prior week.

But demand for emerging market equities remained strong, with investors putting $1.81 billion in new cash into stock funds, the fund-tracking firm said.

CHINA RETURN

In the commodity markets, traders played catch-up after a week-long holiday last week in China, the world's second biggest consumer of many raw materials, which had kept activity subdued, with worries about the economic outlook weighing on sentiment.

Copper, for which China is the world's largest consumer, dipped to a near three-week low at $8,125.25 a metric ton (1.1023 tons) on the London futures market. Benchmark tin and nickel also touched three-week lows.

Gold managed to edge away from six-month lows as jewelers in China returned to the physical market after the Lunar New Year holiday but a lack of demand from U.S. markets saw the precious metal slip back to be down 0.1 percent to $1,607.06 an ounce.

Crude oil markets were mostly steady after the weak U.S. industrial production data on Friday [ID:nL1N0BF44A] was seen dampening demand, while tensions in the Middle East lent some support.

"We continue to see a mixed picture out of the United States. Industry output was lower than expected but that shouldn't affect the general upward direction," Olivier Jakob, analyst at Geneva-based Petromatrix, said.

Brent crude was down 20 cents at $117.46 a barrel after posting its first weekly loss since the first half of January. U.S. crude slipped 24 cents to $95.62.

(Additional reporting by Marius Zaharia and Ron Bousso; Editing by Philippa Fletcher and Alastair Macdonald)

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G20 steps back from currency brink, heat off Japan

MOSCOW (Reuters) - The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

"The market will take the G20 statement as an approval for what it has been doing -- selling of the yen," said Neil Mellor, currency strategist at Bank of New York Mellon in London. "No censure of Japan means they will be off to the money printing presses."

After late-night talks, finance ministers and central bankers agreed on wording closer than expected to a joint statement issued last Tuesday by the Group of Seven rich nations backing market-determined exchange rates.

A draft communiqué on Friday had steered clear of the G7's call for economic policy not to be targeted at exchange rates. But the final version included a G20 commitment to refrain from competitive devaluations and stated monetary policy would be directed only at price stability and growth.

"The mood quite clearly early on was that we needed desperately to avoid protectionist measures ... that mood permeated quite quickly," Canadian Finance Minister Jim Flaherty told reporters, adding that the wording of the G20 statement had been hardened up by the ministers.

As a result, it reflected a substantial, but not complete, endorsement of Tuesday's proclamation by the G7 nations - the United States, Japan, Britain, Canada, France, Germany and Italy.

As with the G7 intervention, Tokyo said it gave it a green light to pursue its policies unchecked.

"I have explained that (Prime Minister Shinzo) Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding," Finance Minister Taro Aso told reporters.

"We're confident that if Japan revives its own economy that would certainly affect the world economy as well. We gained understanding on this point."

Flaherty admitted it would be difficult to gauge if domestic policies were aimed at weakening currencies or not.

NO FISCAL TARGETS

The G20 also made a commitment to a credible medium-term fiscal strategy, but stopped short of setting specific goals as most delegations felt any economic recovery was too fragile.

The communiqué said risks to the world economy had receded but growth remained too weak and unemployment too high.

"A sustained effort is required to continue building a stronger economic and monetary union in the euro area and to resolve uncertainties related to the fiscal situation in the United States and Japan, as well as to boost domestic sources of growth in surplus economies," it said.

A debt-cutting pact struck in Toronto in 2010 will expire this year if leaders fail to agree to extend it at a G20 summit of leaders in St Petersburg in September.

The United States says it is on track to meet its Toronto pledge but argues that the pace of future fiscal consolidation must not snuff out demand. Germany and others are pressing for another round of binding debt targets.

"We had a broad consensus in the G20 that we will stick to the commitment to fulfill the Toronto goals," German Finance Minister Wolfgang Schaeuble said. "We do not have any interest in U.S.-bashing ... In St. Petersburg follow-up-goals will be decided."

The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.

Backing in the communiqué for the use of domestic monetary policy to support economic recovery reflected the U.S. Federal Reserve's commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs.

QE entails large-scale bond buying -- $85 billion a month in the Fed's case -- that helps economic growth but has also unleashed destabilising capital flows into emerging markets.

A commitment to minimize such "negative spillovers" was an offsetting point in the text that China, fearful of asset bubbles and lost export competitiveness, highlighted.

"Major developed nations (should) pay attention to their monetary policy spillover," Vice Finance Minister Zhu Guangyao was quoted by state news agency Xinhua as saying in Moscow.

Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments".

It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

(Additional reporting by Gernot Heller, Lesley Wroughton, Maya Dyakina, Tetsushi Kajimoto, Jan Strupczewski, Lidia Kelly, Katya Golubkova, Jason Bush, Anirban Nag and Michael Martina. Writing by Douglas Busvine. Editing by Timothy Heritage/Mike Peacock)

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G20 steps back from currency brink, heat off Japan

MOSCOW (Reuters) - The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

"The market will take the G20 statement as an approval for what it has been doing -- selling of the yen," said Neil Mellor, currency strategist at Bank of New York Mellon in London. "No censure of Japan means they will be off to the money printing presses."

After late-night talks, finance ministers and central bankers agreed on wording closer than expected to a joint statement issued last Tuesday by the Group of Seven rich nations backing market-determined exchange rates.

A draft communiqué on Friday had steered clear of the G7's call for economic policy not to be targeted at exchange rates. But the final version included a G20 commitment to refrain from competitive devaluations and stated monetary policy would be directed only at price stability and growth.

"The mood quite clearly early on was that we needed desperately to avoid protectionist measures ... that mood permeated quite quickly," Canadian Finance Minister Jim Flaherty told reporters, adding that the wording of the G20 statement had been hardened up by the ministers.

As a result, it reflected a substantial, but not complete, endorsement of Tuesday's proclamation by the G7 nations - the United States, Japan, Britain, Canada, France, Germany and Italy.

As with the G7 intervention, Tokyo said it gave it a green light to pursue its policies unchecked.

"I have explained that (Prime Minister Shinzo) Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding," Finance Minister Taro Aso told reporters.

"We're confident that if Japan revives its own economy that would certainly affect the world economy as well. We gained understanding on this point."

Flaherty admitted it would be difficult to gauge if domestic policies were aimed at weakening currencies or not.

NO FISCAL TARGETS

The G20 also made a commitment to a credible medium-term fiscal strategy, but stopped short of setting specific goals as most delegations felt any economic recovery was too fragile.

The communiqué said risks to the world economy had receded but growth remained too weak and unemployment too high.

"A sustained effort is required to continue building a stronger economic and monetary union in the euro area and to resolve uncertainties related to the fiscal situation in the United States and Japan, as well as to boost domestic sources of growth in surplus economies," it said.

A debt-cutting pact struck in Toronto in 2010 will expire this year if leaders fail to agree to extend it at a G20 summit of leaders in St Petersburg in September.

The United States says it is on track to meet its Toronto pledge but argues that the pace of future fiscal consolidation must not snuff out demand. Germany and others are pressing for another round of binding debt targets.

"We had a broad consensus in the G20 that we will stick to the commitment to fulfill the Toronto goals," German Finance Minister Wolfgang Schaeuble said. "We do not have any interest in U.S.-bashing ... In St. Petersburg follow-up-goals will be decided."

The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.

Backing in the communiqué for the use of domestic monetary policy to support economic recovery reflected the U.S. Federal Reserve's commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs.

QE entails large-scale bond buying -- $85 billion a month in the Fed's case -- that helps economic growth but has also unleashed destabilising capital flows into emerging markets.

A commitment to minimize such "negative spillovers" was an offsetting point in the text that China, fearful of asset bubbles and lost export competitiveness, highlighted.

"Major developed nations (should) pay attention to their monetary policy spillover," Vice Finance Minister Zhu Guangyao was quoted by state news agency Xinhua as saying in Moscow.

Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments".

It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

(Additional reporting by Gernot Heller, Lesley Wroughton, Maya Dyakina, Tetsushi Kajimoto, Jan Strupczewski, Lidia Kelly, Katya Golubkova, Jason Bush, Anirban Nag and Michael Martina. Writing by Douglas Busvine. Editing by Timothy Heritage/Mike Peacock)

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Wall Street declines with slide in Wal-Mart shares

Finola Hughes has called the upcoming 50th anniversary of "General Hospital" a "really sweet" moment."I think the fact that we, at 'GH,' are doing so well right now, and to enter into our 50th anniversary on such a high, it feels really sweet," the actress, who plays Port Charles Police Chief Anna Devane, told Access Hollywood, when asked about the daytime drama's impending anniversary.

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Wall Street flat near multi-year highs, M&A helps

NEW YORK (Reuters) - Stocks were little changed on Thursday as investors found few reasons to keep pushing prices higher with major averages near multi-year highs, though a flurry of merger deals kept indexes steady.

Wall Street has rallied lately, with the S&P 500 briefly hitting its highest intraday level since November 2007 in Wednesday's session. Still, there are few obvious catalysts to continue the rally, and while the S&P is on track for its third straight day of gains, none of those daily gains was more than 0.2 percent.

Shares of H.J. Heinz Co jumped 20 percent to $72.40 after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3 percent to $99.22.

Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index <.vix> fell 1.4 percent, dropping to 12.8.

"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.

"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher."

Equities have struggled to break above their current levels, where they have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year.

Stocks fell earlier after a report the euro zone's gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.

The Dow Jones industrial average <.dji> was down 10.21 points, or 0.07 percent, at 13,972.70. The Standard & Poor's 500 Index <.spx> was up 1.21 points, or 0.08 percent, at 1,521.54. The Nasdaq Composite Index <.ixic> was up 1.12 points, or 0.03 percent, at 3,197.99.

Constellation Brands soared more than 38 percent to $43.93 after AB InBev's deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. U.S. shares of AB InBev gained 5.1 percent to $92.72.

American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 9.1 percent to $13.32.

Weakness in Europe contributed to a 5 percent drop in revenue from the region for Cisco Systems , which nonetheless beat estimates as it reported its results late Wednesday. The company's shares slid 1.3 percent to $20.87.

General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 2.8 percent at $27.88.

(Editing by Nick Zieminski)

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Wall Street rally stalls, S&P 500 skims November 2007 high

NEW YORK (Reuters) - Stocks were little changed on Wednesday amid investor caution after the S&P 500 index briefly hit its highest intraday level since November 2007.

The benchmark index got a boost from Comcast Corp , which said it will buy the rest of NBC Universal for $16.7 billion from General Electric Co .

Equities have been strong performers until recently, buoyed largely by healthy growth in corporate earnings, which helped the S&P 500 to rise 6.5 percent so far this year. The Dow industrials are about 1 percent away from an all-time intraday high, reached in October 2007.

Those gains have left the market vulnerable to a pullback as investors are likely to take profit amid a dearth of new catalysts. While analysts see an upward bias in stocks, recent daily moves have been small and trading volumes light with indexes at multi-year highs.

"I was expecting a 12-15 percent return on the S&P for the whole year of 2013, and we have done about half of that in just 5-6 weeks," said Jack De Gan, principal at Harbor Advisory in Portsmouth, New Hampshire.

"We will hit resistance, but the fundamentals and (microeconomic) picture are looking good, so if there is a correction, it's going to be a brief one."

The Dow Jones industrial average <.dji> was down 39.17 points, or 0.28 percent, at 13,979.53. The Standard & Poor's 500 Index <.spx> was up 0.80 points, or 0.05 percent, at 1,520.23. The Nasdaq Composite Index <.ixic> was up 7.01 points, or 0.22 percent, at 3,193.50.

Investors shrugged off the latest economic data, which showed that retail sales rose just 0.1 percent, as expected, in January as tax increases and higher gasoline prices restrained spending.

The S&P 500 was well above its 50-day moving average of 1,460.92, a sign the market could be overbought.

Comcast agreed late Tuesday to buy General Electric Co's remaining 49 percent stake in NBC Universal for $16.7 billion. Comcast jumped 4.4 percent to $40.70 as the S&P's top percentage gainer while Dow component GE was up 3.3 percent to $23.33.

Deere & Co reported earnings that beat expectations and raised its full-year profit outlook. After initially rallying in premarket trading, the stock fell 3 percent to $91.13.

According to the latest Thomson Reuters data, of the 353 companies in the S&P 500 that have reported results, 70.3 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 are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Industrial and construction shares fell, though President Barack Obama, in his State of the Union address late Tuesday, called for $50 billion in spending to create jobs by rebuilding degraded roads and bridges.

The Dow Jones Home Construction index <.djushb> was off 0.5 percent.

(Editing by Kenneth Barry and Bernadette Baum)

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Wall Street edges up, Dow nears all-time high

NEW YORK (Reuters) - Stocks edged higher on Tuesday, putting the Dow within striking distance of all-time highs as investors looked ahead to President Barack Obama's State of the Union address, which is expected to focus on the economy.

Jobs and economic growth are seen as major themes of Obama's speech, scheduled to begin at 9 p.m. (0200 GMT Wednesday). Investors will also listen for any clues on a deal with Republicans to avert automatic spending cuts due to take effect March 1, including the tone of the speech.

The S&P 500 has risen for the past six weeks, putting it up 6.7 percent so far this year, while the Dow is about 1 percent away from its all-time intraday record of 14,198.10, reached in October 2007.

But gains have been harder to come by since the benchmark S&P index hit a five-year high on February 1. The market has had to consolidate strong gains at the year's start while investors search for reasons to drive stocks higher.

"We're likely to settle in for a period and digest the gains we've had, though there's still a bias towards positive momentum," said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina. "Questions over government spending are the big overhang, and we're looking for Obama to inspire some confidence over that tonight."

The White House has signaled Obama will urge investment in infrastructure and clean energy, suggesting companies in those sectors may be volatile in Wednesday's session.

"Gun makers could also see a reaction if Obama talks about anything with respect to gun control," said Teal, who helps oversee $5 billion. Shares of Smith & Wesson were flat at $9.13 while Sturm Ruger was up 0.5 percent at $53.96.

The Dow Jones industrial average <.dji> was up 58.06 points, or 0.42 percent, at 14,029.30. The Standard & Poor's 500 Index <.spx> was up 3.34 points, or 0.22 percent, at 1,520.35. The Nasdaq Composite Index <.ixic> was down 1.91 points, or 0.06 percent, at 3,190.09.

Housing shares were among the strongest of the day, led by a 14.4 percent jump in Masco Corp to $20.35 after the home improvement product maker said it expects new home construction to show strong growth in 2013. The PHLX housing sector index <.hgx> rose 4.3 percent.

Avon Products Inc surged 23 percent to $21.25 as the S&P 500's top percentage gainer after the cosmetics company reversed sales declines and cut costs.

On the downside, Coca-Cola Co fell 2.7 percent to $37.58 and were the biggest drag on the Dow after reporting revenue that was below estimates, hurt by a weaker-than-expected performance in Europe.

Goodyear Tire & Rubber shares slipped 0.4 percent to $13.86 after it posted a stronger-than-expected quarterly profit but cut its 2013 forecast due to weakness in the European automotive market.

Michael Kors Holdings shares jumped 10.8 percent to $63.18 after the fashion company handily beat Wall Street's estimates and raised its full-year outlook.

With earnings season starting to wind down, Thomson Reuters data through Tuesday morning shows of the 353 companies in the S&P 500 that have reported earnings, 70.3 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 are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(Editing by Nick Zieminski)

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Wall Street ticks lower, investors seek new catalysts

NEW YORK (Reuters) - Stocks fell modestly on Monday as investors found few reasons to keep pushing shares higher following a six-weeks-long advance that has taken the S&P 500 index near record highs.

The benchmark index is up more than 6 percent so far this year after a steep rally in January that has stalled as the S&P and Dow industrials near multi-year highs.

"This is still a market that looks terrific, but when you're up for six weeks in a row, everyone is going to want to take a pause going into the seventh week even if there is no bad news out there," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

The S&P 500 would need to rise 3.9 percent to reach its all-time intraday high of 1,576.09, which was hit in October 2007.

Google Inc shares fell 1 percent at $777.67 after the company said in a filing former chief executive Eric Schmidt is selling roughly 42 percent of his stake in the Internet search giant, a move that could potentially net him $2.51 billion.

But the decline was offset by gains in Apple , up 1.4 percent at $481.73 after a New York Times report that the iPhone maker is experimenting with the design of a device similar to a wristwatch.

The Federal Reserve's Vice Chair Janet Yellen, seen as a potential successor to Fed Chairman Ben Bernanke next year, said the Fed is still aggressively stimulating an anemic U.S. economic recovery that has failed to bring rapid progress on employment.

The Dow Jones industrial average <.dji> was down 31.05 points, or 0.22 percent, at 13,961.92. The Standard & Poor's 500 Index <.spx> was down 1.80 points, or 0.12 percent, at 1,516.13. The Nasdaq Composite Index <.ixic> was down 5.25 points, or 0.16 percent, at 3,188.62.

Upbeat U.S. and Chinese data last week helped the S&P 500 extend its weekly winning streak to six. The index gained about 8 percent over that period.

Equities have been strong performers lately, rising 6.3 percent so far this year. Many investors have used any declines in the market as opportunities to buy.

"Everyone wants to buy on a dip in this market, but if you're on the sidelines right now, the decline we're seeing today just isn't the kind you would jump in on," Kuby said.

President Barack Obama will describe his plan for spurring the economy in his State of the Union address on Tuesday. He is expected to offer proposals for investment in infrastructure, manufacturing, clean energy and education.

Opposition has grown to the $24.4 billion buyout of Dell Inc , the No. 3 personal computer maker, as three of the largest investors joined Southeastern Asset Management on Friday in raising objections. Dell said in a regulatory filing it had considered many strategic options before opting to go private in a buyout led by Chief Executive Michael Dell.

Dell shares hovered near $13.65, the buyout offer price.

Regeneron Pharmaceuticals Inc shares rose 1.6 percent at $168.72 after it said longtime drug development partner Sanofi plans to boost its stake.

Moody's Corp was one of the strongest percentage gainers on the S&P 500, rising 3.9 percent to $45.06. Last week the stock plunged 22 percent after the U.S. government launched a civil lawsuit against the company. The sell-off marked the stock's worst week since October 2008.

(Editing by Nick Zieminski)

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G20 to skirt potholes and follow growth signposts

LONDON (Reuters) - With the road ahead looking a bit smoother, G20 finance ministers will be happy to ignore the wreck in the rear-view mirror when they meet this week to steer a course for the world economy.

The euro zone as a whole and a clutch of its members, including France, Italy and the Netherlands, are expected to report that their economies shrank last quarter - joining Germany and the United States - while Japan's barely grew, according to economists polled by Reuters.

But the Group of 20 leading economies, which meets in Moscow on Friday, should be able to take heart from a pair of more timely indicators - a New York Fed manufacturing survey and a University of Michigan poll on consumer sentiment.

Economists expect both to show an improvement, despite the gnawing uncertainty of how long-running U.S. deficit reduction negotiations will affect taxes and spending.

Luca Paolini, chief strategist at Pictet Asset Management in London, said he was more positive on the global outlook on balance but a sense of perspective was needed. Buoyant markets risked getting ahead of themselves.

"Our own leading indicators are going up, but we don't think we're in a strong growth environment. We see weak growth, and that's not going to change this year," he said.

PASSING THE GROWTH BATON

Simon Hayes, an economist with Barclays Capital, broadly agreed. "On the whole, recent activity data have been encouraging of our view that the global economy is improving, albeit slowly," he said in a report.

January U.S. retail sales figures are likely to underline this point. Hobbled by the January 1 increase in payroll taxes, economists expect a rise of just 0.1 percent on the month.

By contrast, U.S. capital spending is finally perking up from a low level as corporations, realizing that protracted cost-cutting is hurting productivity and growth prospects, give the green light to pent-up investments, Paolini said.

"But we're not overly optimistic because investment is based on confidence. You can have all the money you want, but you're not going to invest if you expect growth to be weak. So if we have any kind of shock - it can be politics or something else - investment will fall again," he said.

China delivered a boost to confidence on Friday with a batch of strong trade and money data for January.

Economists are wary of reading too much into China's figures at the start of the year because of distortions due to the variable timing of the long Lunar New Year holidays.

But Ting Lu, Bank of America Merrill Lynch's chief China economist, said they supported his view that gross domestic product growth could accelerate to 8.3 percent in the first half of this year from 7.9 percent in the fourth quarter of 2012.

China is not the only developing economy that is doing its bit for global growth.

Mark Williams, chief Asia economist with Capital Economics in London, said there had been signs of a rebound across the emerging world in the past month. Goldman Sachs, too, said there had been a marked improvement in consumer confidence across emerging markets coming into 2013.

"It had been the case that Latin America and Asia were looking up at the end of last year but emerging economies in Europe were still looking very weak. But even they are now joining in the recovery. So it's looking increasingly broad-based," Williams said.

CURRENCY SKIRMISHES

One obvious pothole on the road to recovery is the threat of a spate of competitive devaluations, as growth-hungry countries seek to give their exporters an edge by talking down their currencies or actively pushing them lower by bold monetary easing.

Japan has come in for fierce criticism in some quarters for that very reason, but Finance Minister Taro Aso sought to restore calm on Friday by saying the recent slide in the yen had gone too far.

His emollient words reinforced expectations that the G20 will not point the finger at Tokyo.

At the same time, European Central Bank President Mario Draghi's success in reversing the euro's climb with a few well-chosen words last Thursday has eased the worries of France and others for now that the single currency was approaching levels that would do real damage to the euro area.

So, although Brazilian Finance Minister Guido Mantega fears global currency wars could intensify, the betting is on an anodyne statement from the Moscow meeting that avoids rattling confidence.

"There will be something very vague reminding everybody that if you start getting into currency wars everybody is going to lose," Paolini with Pictet said.

(Editing by Toby Chopra)

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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 jumps; Nasdaq near 12-year high

NEW YORK (Reuters) - Stocks climbed on Friday, pushing the S&P 500 to a fresh five-year high and putting the Nasdaq within a hair of a 12-year intraday high, following a batch of encouraging domestic and international economic reports.

Data showing stronger international trade in China and Germany, and a report indicating the U.S. trade deficit had narrowed in December, pointed to improving global demand.

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

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1 percent. Gains in LinkedIn Corp and AOL Inc following their quarterly results helped the sector.

The benchmark S&P 500 <.spx>, up more than 6 percent for the year, is on track for six straight weeks of gains for the first time since August 2012.

But an advance has been tougher in recent days as investors await strong trading incentives to drive the index further upward.

"I think we're in the middle of a trading range and I'd put plus or minus 5 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> was up 40.94 points, or 0.29 percent, at 13,984.99. The Standard & Poor's 500 Index <.spx> was up 7.72 points, or 0.51 percent, at 1,517.11. The Nasdaq Composite Index <.ixic> was up 27.94 points, or 0.88 percent, at 3,193.08.

The Nasdaq was just 3 points shy of its highest level since November 2000.

Shares of LinkedIn jumped 21.1 percent to $150.31 after announcing quarterly profits and giving a bullish forecast for the year.

AOL Inc shares rose 7.5 percent to $33.77 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 4.2 percent at 12.94. 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."

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.

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.

(Additional reporting by Angela Moon; Editing by Bernadette Baum and Nick Zieminski)

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Wall Street dips on renewed euro zone fears

NEW YORK (Reuters) - Stocks fell on Thursday as comments by the ECB president on the euro raised worries about Europe's outlook and curbed investors' appetite for risky assets.

The euro currency dropped against the safe-haven dollar and yen after European Central Bank President Mario Draghi said the exchange rate was important to growth and price stability, which investors took as a sign the bank is concerned about the euro's advance in recent days.

Materials shares were among the weakest performers on the S&P 500, with the S&P 500 materials index <.splrcma> down 0.7 percent, while housing stocks also declined. A housing sector index <.hgx> was off 1.4 percent.

Despite the day's decline and weakness earlier this week, the stock market has been in an almost uninterrupted uptrend for most of the year, with the S&P 500 gaining more than 5 percent for 2013.

Many investors could see buying opportunities in the decline.

"I don't think there's the systemic risk that we had some time ago of bank failures in Europe and so forth. They seem to be ahead of that sort of crisis," said Dan Veru, chief investment officer of Palisade Capital Management, in Fort Lee, New Jersey.

The Dow Jones industrial average <.dji> was down 67.95 points, or 0.49 percent, at 13,918.57. The Standard & Poor's 500 Index <.spx> was down 6.31 points, or 0.42 percent, at 1,505.81. The Nasdaq Composite Index <.ixic> was down 16.76 points, or 0.53 percent, at 3,151.72.

Top U.S. retailers reported strong January sales after offering compelling merchandise that drew in shoppers facing a hit to their take-home pay from higher payroll taxes.

Macy's Inc rose 1.5 percent to $40.09 after reporting January same store sales rose 11.7 percent.

But Ann Inc dropped 6.7 percent to $30.59 after forecasting fourth-quarter sales below analysts' expectations.

Fund manager David Einhorn's Greenlight Capital on Thursday said it has sued Apple Inc and said the company needs to do more to unlock value for shareholders. Apple shares gained 0.6 percent to $457.43.

Akamai Technologies Inc lost 15.6 percent to $35.06 as the worst performer on the S&P 500 after the Internet content delivery company forecast current-quarter revenue below analysts' expectations.

(Additional reporting by Angela Moon; Editing by Kenneth Barry and Nick Zieminski)

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Wall Street pulls back after recent gains

NEW YORK (Reuters) - Stocks drifted lower on Wednesday as investors pulled back after the recent push to five-year highs on the S&P 500 and as worries about political problems in Europe weighed on sentiment.

Transportation stocks were among the worst performers, pressured by a 9.7 percent drop in CH Robinson Worldwide to $60.48 after the freight transport company posted a lower-than-expected adjusted quarterly profit.

The benchmark S&P 500 index has advanced 6 percent this year and reached to its highest since December 2007. The Dow industrials <.dji> have risen above 14,000 recently, making it a challenge for investors to push stocks higher in the absence of strong positive catalysts.

"The market is starting to feel a little tired, though we're holding together. I think a lot of people are wondering whether this (up trend) continues," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

Also, investors have been speculating about leadership changes in Spain and Italy, as well as watching for comments from European leaders. European Central Bank policymakers are due to meet Thursday.

The Dow Jones industrial average <.dji> was down 27.37 points, or 0.20 percent, at 13,951.93. The Standard & Poor's 500 Index <.spx> was down 3.66 points, or 0.24 percent, at 1,507.63. The Nasdaq Composite Index <.ixic> was down 12.27 points, or 0.39 percent, at 3,159.31.

Both the S&P 500 and Nasdaq rose more than 1 percent on Tuesday.

The Dow Jones Transportation average <.djt> was down 0.4 percent after hitting another record high on Tuesday. The average is up 10.4 percent for the year so far and has made a series of new highs since mid-January.

Among shares trading higher, Time Warner Inc jumped 4.4 percent to $52.18 after reporting higher fourth-quarter profit that beat Wall Street estimates, as growth in its cable networks offset declines in film, TV entertainment and publishing units.

Walt Disney Co was up 0.7 percent at $54.66, after the company beat estimates for quarterly adjusted earnings and gave an optimistic outlook for the next few quarters.

According to Thomson Reuters data, of 301 companies in the S&P 500 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.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 4.7 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(Editing by Bernadette Baum, Kenneth Barry and Nick Zieminski)

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Wall Street climbs on results; Dow above 14,000

NEW YORK (Reuters) - Stocks climbed on Tuesday, pushing the Dow above 14,000 a day after the market's biggest sell-off since November, as stronger-than-expected earnings brightened the profit picture.

All 10 S&P sectors were higher, and the S&P 500 and Nasdaq gained more than 1 percent.

Dell Inc's stock rose after the world's No. 3 computer maker agreed to be taken private in a $24.4 billion deal, the largest leveraged buyout since the 2008-2009 financial crisis. The stock gained 1.3 percent to $13.44 after a delayed open.

The market's bounce follows a sell-off on Monday that gave the S&P 500 its biggest percentage decline since mid-November. Still, the benchmark is up about 5 percent since the start of the year and is less than 5 percent away from its all-time intraday high of 1,576.09 in October 2007.

Analysts said fourth-quarter results have been among the positives for the market. On Tuesday, Archer Daniels Midland reported revenue and adjusted fourth-quarter earnings that beat expectations, boosted by strong global demand for oilseeds. Shares rose 3.4 percent to $29.40.

"This quarter was one that had relatively low expectations coming into it, but the beats on the earnings and on the revenue side have been pretty good, particularly on the revenue side," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

"And in the aggregate so far, the earnings growth is just under 5 percent, and that's relieved those who thought maybe the earnings picture was deteriorating to the point where we would see surprisingly poor earnings."

The Dow Jones industrial average <.dji> was up 121.49 points, or 0.88 percent, at 14,001.57. The Standard & Poor's 500 Index <.spx> was up 16.95 points, or 1.13 percent, at 1,512.66. The Nasdaq Composite Index <.ixic> was up 40.79 points, or 1.30 percent, at 3,171.96.

Also in earnings, Estée Lauder Cos Inc reported a higher quarterly profit and raised its full-year profit forecast. The stock rose 5.7 percent to $64.52.

With results in for more than half of the S&P 500 companies, 69 percent have beaten profit expectations, compared with 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.

On the down side, McGraw-Hill shares slumped 7.5 percent to $46.51 after the Justice Department filed a civil lawsuit against it seeking $5 billion over mortgage bond ratings. Standard & Poor's, a McGraw Hill unit, was accused of inflated ratings and understated risks out of a desire to gain more business from investment banks.

On Monday, the stock suffered its worst one-day decline since the 1987 market crash.

(The story corrects year of S&P 500 all-time intraday high to 2007 from 2011. The error occurred in earlier updates. In final paragraph removes word "market")

(Additional reporting By Angela Moon; Editing by Kenneth Barry)

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Wall Street pulls back after recent gain; data disappoints

NEW YORK (Reuters) - Stocks dropped on Monday, pulling back from gains in the prior session that left the S&P 500 at a five-year high and the Dow above 14,000, as factory orders data disappointed and worries about the euro zone crisis resurfaced.

The S&P 500 was on track for its biggest daily percentage decline since December 28. Chevron and Wal-Mart were among the biggest drags on the Dow after analyst downgrades.

"The market is due for a pullback. That's not really a surprise. I think people are looking for an excuse to make sales," said Michael James, senior trader at Wedbush Morgan in Los Angeles.

Spanish and Italian bond yields rose, renewing worries about the euro zone's sovereign debt crisis. Spain's prime minister faced calls to resign over a corruption scandal, while a probe of alleged misconduct involving an Italian bank was expected to widen three weeks before a national election.

Data from the Commerce Department showed overall factory orders for December were below economists' expectations.

The Dow Jones industrial average <.dji> was down 120.19 points, or 0.86 percent, at 13,889.60. The Standard & Poor's 500 Index <.spx> was down 14.65 points, or 0.97 percent, at 1,498.52. The Nasdaq Composite Index <.ixic> was down 40.53 points, or 1.27 percent, at 3,138.57.

The benchmark S&P 500 rose on Friday, leaving it roughly 60 points away from its all-time intraday high of 1,576.09, while the Dow's march above 14,000 was the highest for the index since October 2007.

The S&P index <.spx> is up 5.5 percent for the year, with nearly half of the gains coming after U.S. legislators temporarily sidestepped the "fiscal cliff" of automatic tax increases and spending cuts.

The CBOE Volatility index VIX <.vix>, Wall Street's so-called fear gauge, jumped more than 10 percent to 14.48 by afternoon trade.

Chevron Corp dipped 0.9 percent to $115.50 after UBS cut its rating to neutral, while Wal-Mart Stores Inc shed 1.1 percent to $69.69 after JP Morgan lowered its rating on the world's largest retailer and reduced its price target.

Shares of household products company Clorox rose 1.3 percent to $80.23 after quarterly profit beat analysts' estimates as a severe flu season boosted sales of disinfecting wipes.

According to Thomson Reuters data, of the 256 companies in the S&P 500 that have reported earnings through Monday morning, 68.4 percent have reported earnings above analyst expectations compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.

S&P 500 fourth-quarter earnings are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast on October 1.

Herbalife Ltd slumped 2.5 percent to $34.16 after the New York Post newspaper reported the seller of weight loss products is facing a probe by the Federal Trade Commission.

(Additional reporting by Angela Moon; Editing by Kenneth Barry and Nick Zieminski)

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