NEW YORK -- Most U.S. stocks retreated Friday, dragging the Standard & Poor's 500 index lower for the week, as earnings from companies including General Electric to Intel Corp. disappointed investors.
General Electric lost 2.3 percent as margins at its manufacturing units fell short of projections. Intel dropped 2.6 percent as its revenue forecast raised concern the personal- computer market is struggling to grow. United Parcel Service slid 0.6 percent as it projected earnings below analysts' estimates. American Ex
press climbed 3.6 percent after reporting fourth-quarter profit doubled.
The S&P 500 fell 0.4 percent to 1,838.70. The Dow Jones industrial average rose 41.55 points, or 0.3 percent, to 16,458.56 as American Express and Visa surged. Markets will close on Jan. 20 for the Martin Luther King Jr. Day holiday.
"Investors are taking cues from earnings releases," Jim Russell, who helps oversee $113 billion as a senior equity strategist for U.S. Bank Wealth Management, said by phone. "Just as important as fourth-quarter earnings are, many investors are watching for company guidance for signs on what early 2014 will bring. This year, we'll see a tearing between winners and losers and we've seen that in this earnings season so far."
About 6.9 billion shares changed hands on U.S. exchanges Friday amid the expiration of options contracts, 13 percent higher than the three-month average. About three stocks fell for every two that rose.
A five-year rally that lifted the S&P 500 up more than 170 percent from a bear-market low has boosted equity valuations to near the highest level since 2009. The S&P 500 trades at 15.6 times the estimated earnings of its members, more than the five- year average multiple of 14.1, data compiled by Bloomberg show.
Seven companies in the S&P 500 including General Electric and Morgan Stanley reported financial results Friday. Per-share profit for companies in the benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2 percent, according to analysts surveyed by Bloomberg.
"The market just can't seem to get going this year," Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas Asset Management in Norfolk, Va., which oversees $2.4 billion, said in a phone interview. "Earnings are OK, but for the market to go much higher, earnings are going to have to be really good."
Reports on Friday showed mixed data on the economy, with industrial production rising for a fifth month in December while the Thomson Reuters/University of Michigan preliminary January index of consumer sentiment unexpectedly fell.
The pace of U.S. home construction dropped less than forecast in December, capping the best year for the industry since 2007.
The Chicago Board Options Exchange Volatility Index dropped 0.7 percent Friday to 12.44. The gauge of S&P 500 options known as the VIX is down 9.3 percent this year.
All 10 industry groups in the S&P 500 slipped as consumer-staples, technology and industrial companies fell more than 0.5 percent to lead the retreat.
General Electric slipped 2.3 percent to $26.58. The company reported operating earnings per share in line with analyst estimates. Profit margins at the manufacturing divisions expanded 60 basis points, according to a presentation posted on GE's website. That fell short of guidance for 70 basis points of growth that CEO Jeffrey Immelt first laid out in December 2012 and affirmed as recently as last month.
Intel erased 2.6 percent to $25.85. The world's largest maker of computer chips forecast first-quarter revenue that may fall short of some analysts' estimates as corporate demand fails to reignite personal-computer sales. Consumer notebook demand is declining in Asia, CEO Brian Krzanich said.
UPS dropped 0.6 percent to $99.91 after the shipping company projected fourth-quarter earnings that trailed analysts' estimates. A surge of packages from online shopping just before Christmas forced the company to hire more temporary workers than planned and miss holiday deliveries.
SLM lost 9.8 percent, the most in the S&P 500, to $24.47. The student lender known as Sallie Mae reported a fourth-quarter profit decline of 22 percent.
Capital One Financial fell 5.3 percent to $72.39. The credit-card lender said fourth-quarter profit missed some analysts' estimates as expenses came in higher than estimated.
American Express climbed 3.6 percent to a record $90.97. The biggest credit-card issuer by purchases benefited from a pickup in household wealth and consumer confidence that has propelled card purchases. Sanford C. Bernstein & Co. raised its profit estimates.
Visa, the world's biggest bank-card network, jumped 4.7 percent to $232.18, also a record. AmEx and Visa added a combined 87 points to the Dow on Friday.
Morgan Stanley added 4.4 percent to $33.40. The owner of the world's largest brokerage reported profit that beat analysts' estimates as equity-trading revenue increased and earnings from wealth management climbed to a record.
Electronic Arts jumped 12 percent to $24.10 for the biggest increase in the S&P 500. The second-largest U.S. video-game maker was rated buy in new coverage by CRT Capital Group. Separately, U.S. spending on video-game hardware surged to its highest in three years in December, according to Port Washington, N.Y.-based NPD Group.