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Stronger profits from Microsoft, McDonald’s and other major U.S. corporations pushed stocks higher Friday. Optimism from Europe helped brighten the mood.

The Dow Jones industrial average and the Standard & Poor’s 500 index had a winning week for the first time this month.

“There’s been a wrestling match all week long between strong earnings and weak economic data,” said Lawrence Creatura, a portfolio manager at Federated Investors, the money-management firm. “At the moment, earnings are winning.”

Before the market opened, McDonald’s posted better quarterly profits, buoyed by warm weather and sales of new menu items like Chicken McBites and oatmeal. Sales picked up even in Europe, McDonald’s’ biggest market, despite economic turmoil and severe weather.

Microsoft beat analysts’ projections with quarterly earnings and revenue, and sales in its Windows division were surprisingly strong. And General Electric posted a profit of more than $3 billion, helped by orders for locomotives, aircraft engines and other equipment.

The Dow rose 65.16 points to close at 13,029.26. The S&P 500 added 1.61 points to 1,378.53.

Corporate earnings results have provided a pleasant surprise, said Sam Stovall, chief equity strategist at S&P Capital IQ. After nine straight quarters of growth, earnings for S&P 500 companies were expected to be nearly flat. But eight of every 10 companies that have reported so far, including Coca-Cola and IBM, have beaten estimates. As a result, first-quarter earnings are now projected to rise 4.4 percent, according to S&P.

In Europe, Germany’s DAX rose 1.2 percent, and stock indexes in France and Spain were higher. A closely watched survey in Germany, the continent’s economic powerhouse, showed business optimism rising for the sixth straight month. Economists had expected a decline.

In other U.S. trading, Apple sank 2.5 percent, helping to tug the Nasdaq composite index down 7.11 points to 3,000.45. Apple, the most valuable company in the world, accounts for 12 percent of the Nasdaq.

The Dow gained 1.4 percent this week, and the S&P 500 index 0.6 percent. But it wasn’t a smooth ride. Better earnings reports and higher retail sales helped drive the stock market up to start the week free credit report and score. The Dow rose 194 points on Tuesday, its best day in more than a month.

Then worries about Europe came storming back. Markets reversed course Wednesday, after the Bank of Spain said that the amount of bad loans held by Spanish banks rose to an 18-year high.

If those banks falter, it would put pressure on Spain’s already troubled government to prop them up. Weak reports on jobs, housing and manufacturing in the U.S. added to the selling pressure, and the Dow slumped 151 points in two days.

“It’s been like the weather here in upstate New York _ unpredictable,” Creatura said. “One day is up, the next day is down.”

The encouraging news out of Germany helped drive oil prices up Friday. Benchmark U.S. crude rose 78 cents to finish at $103.05 per barrel in New York. Brent crude, widely used by U.S. refiners to produce gasoline, added 76 cents to $118.76 in London.

Among stocks making big moves in the United States:

_ Oil services giant Schlumberger Ltd. rose 3 percent. The company’s quarterly profits jumped almost 38 percent as strong drilling activity in the Gulf of Mexico and the Middle East offset a slowdown in North America’s natural gas fields. Schlumberger said that world oil demand appears to have “stabilized” and that the risk of a double-dip recession has declined.

_ E-Trade Financial Corp. jumped 6 percent, the largest gain in the S&P 500. The online broker reported a 40 percent jump in first-quarter profit after the close of trading Thursday, beating Wall Street estimates with the help of a big tax benefit.

_ SanDisk Corp. plummeted 11 percent, the S&P’s biggest loser. The flash memory maker said late Thursday that weak demand and low prices cut its quarterly profit by nearly half. SanDisk warned that it expects the trend to continue.

_ Tempur-Pedic International Inc., the mattress maker, plunged 20.6 percent after posting a disappointing full-year earnings forecast. It cited concerns about competition and foreign exchange rates.

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IBM posted first-quarter earnings Tuesday that beat analysts’ estimates.

The tech giant reported a profit of $3.1 billion, an increase of 7% versus last year. Revenue for the quarter was $24.7 billion, up slightly from a year ago.

Excluding certain charges, earnings per share came in at $2.78, above estimates of $2.65. The company, which is the enterprise world’s largest vendor, is one of the hottest stocks in tech and has consistently topped Wall Street profit expectations for the past few quarters.

However, shares of IBM (, Fortune 500) were down 2% in after-hours trading as sales narrowly missed analysts’ forecasts of $24.8 billion.

IBM expects the future to be brighter: It raised its full-year earnings per share estimates to "at least" $15, up from a previous forecast of $14.85.

"We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives," IBM CEO Ginni Rometty in a release, citing those factors for IBM’s decision to to raise its guidance.

Rometty, formerly the company’s senior vice president for sales, marketing and strategy, succeeded CEO Sam Palmisano after he stepped down in October.

IBM has made a big push into software and services, two of the more rapidly growing and profitable areas of tech, over the past few years.

"When you look at our offerings in business analytics, cloud, and Smarter Planet, about half of the revenue is software," IBM CFO Mark Loughridge said during a conference call with analysts.

IBM’s earnings report came on a busy day for the tech sector. Intel (, Fortune 500) and Yahoo (, Fortune 500) also both released their latest financial results after the closing bell Tuesday.  

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Spain

Rupert Murdoch’s News International is challenging celebrity phone hacking victim Sienna Miller over her legal bill, a person close to the case said late Wednesday.

Miller was one of the first public figures to take the British newspaper company to court for illegally eavesdropping on her telephone messages.

In May, News International agreed to pay the “Alfie” star 100,000 pounds (about $160,000) to settle her claim, but a person close to the case says there’s been no agreement how much to pay out in legal costs and that the issue is headed to court.

The person provided no detail as to when any potential hearing would take place, speaking anonymously because the information wasn’t cleared for release.

News International spokeswoman Daisy Dunlop declined comment, as did Miller’s lawyer, Mark Thomson.

The scandal over illegal interception of voicemail messages at News International’s now-defunct News of the World tabloid has taken a bite out of parent company News Corp.’s bottom line. In February, Murdoch’s international media company disclosed that legal bills linked to police and parliamentary probes, a judge-led inquiry, and a slew of lawsuits was close to $200 million.

In the last quarter of 2011 alone, the company paid out $87 million, the vast majority of which was for legal and consulting fees.

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The economy grew at an annual rate of 3 percent in the final three months of 2011, the best pace in a year and a half. But that growth has likely slowed in the current quarter.

Businesses have been restocking their shelves more slowly and shipping fewer long-lasting manufactured goods. In addition, Europe’s debt crisis and weaker growth in Asia have slowed demand for U.S. exports.

Stronger hiring in the first two months of the year probably hasn’t offset those weaknesses. That’s because Americans’ pay has barely kept pace with inflation even as gas prices have spiked. So consumer spending, which drives about 70 percent of economic activity, probably hasn’t increased much from the end of last year.

Most economists expect growth to pick up later this year as further hiring lifts the economy.

The Commerce Department reported no change Thursday in its previous growth estimate for the October-December quarter. The 3 percent annual rate was the strongest since the spring of 2010. Slower growth in exports than previously estimated was offset by stronger business investment.

Still, economists expect growth has probably slowed to 2 percent or less in the current January-March quarter.

A key reason for that: Businesses haven’t been restocking their shelves as fast as they did at the end of last year. Many had slashed inventories over the summer out of fear that the economy was on the verge of another recession. When that didn’t happen, many stepped up restocking. Inventory building was a key driver of growth in the October-December quarter.

Even though businesses are still replenishing their shelves, the pace has likely slowed. That has likely slowed growth this quarter.

Businesses also are investing less in machinery and equipment this year after a tax credit expired at the end of last year. Orders for durable goods plunged in January. Though orders rebounded in February, that increase didn’t offset the entire January decline. And shipments of core capital goods, a gauge of business investment, grew sluggishly in the three months that ended in February, economists said. That’s also likely holding back growth this quarter.

One bright spot is that hiring has picked up. The economy has added an average of 245,000 jobs per month from December through February. The unemployment rate has fallen by nearly a full percentage point since the summer to 8.3 percent, the lowest level in three years.

The Labor Department said Thursday that the number of people seeking unemployment benefits fell to 359,000 last week, the lowest level in four years. That suggests March was another solid month for hiring.

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Dartmouth College President Jim Yong Kim was nominated by the U.S. to head the World Bank, making him the first physician and Asian-American to lead the lender that provided $57 billion to developing countries last fiscal year for everything from building roads to improving access to health care.

Kim, 52, who was born in Seoul and emigrated with his parents from South Korea at age five, would succeed Robert Zoellick, a former U.S. trade representative whose term ends in June. The U.S. is the biggest shareholder in the Washington- based bank, which has always been led by an American.

A fluid agreement

Pinnacle Entertainment’s agreement with the city in April 2004 has been amended six times. Some of the changes have been substantial.

July 2005 — An amendment approved by the city’s Land Clearance for Redevelopment Authority allowed Pinnacle to deduct from its $50 million obligation the $2.65 million it spent on parking lots near Lumière Place.

February 2011 — An amendment was added to let Pinnacle deduct $400,000 from a $1 million “additional city services fee” due next January if it fails to meet the $50 million investment level by the end of 2012. The $400,000 represents the company’s agreement to reimburse the city its legal bill in a dispute involving the state gaming license Pinnacle surrendered when it closed the President Casino paperless payday loans.

January 2012 — An amendment expanded the redevelopment area to cover the Stamping Lofts site at First Street and Cass Avenue. Stamping Lofts is to be a low-income housing development associated with FarmWorks, an “aquaponics” and indoor fish farm project.

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Australia recorded a trade deficit in January, its first in 11 months, on weaker exports of gold, iron ore and coal. The local currency declined.

Imports outpaced exports by A$673 million ($715 million), from a revised A$1.33 billion surplus in December, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 24 economists was for a surplus of A$1.5 billion.

The data add to pressure on central bank Governor Glenn Stevens to end a two-month pause in interest-rate cuts after the economy slowed last quarter and payrolls fell in February. The currency has strengthened this year on a A$456 billion pipeline of resource projects driven by companies such as BHP Billiton Ltd. (BHP) even as concern remains that Europe

Italy

Last minute shoppers gave merchants a solid lift during the final week before Christmas, according to a report from a mall trade group Wednesday.

Revenue at stores open at least a year rose 0.9 percent for the week ended Saturday compared with the previous week. That is also up 3.4 percent from the week before, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index.

Revenue at stores opened at least a year for the week ended Saturday rose 4.5 percent compared with the same period a year ago. The index serves as a sales proxy to 24 major stores including Macy’s Inc. and Costco Wholesale Corp.

“The downs and ups were much more accentuated,” said Michael P. Niemira, chief economist at the council. “It just shows how cautious the consumer is. Consumers are bargain hunters more today than ever before personal loan for poor credit.”

For the week ended on Nov. 26, which included the traditional start of the holiday shopping season on the day after Thanksgiving, stores had the biggest sales surge compared with the prior week since 1993, according to the ICSC-Goldman Sachs weekly index. The cumulative two-week-sales drop-off that followed marked the biggest percentage decline since 2000. Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, Niemira says.

“The holiday season was good but uneven,” Niemira said.

ICSC expects that holiday sales for the November and December combined will be in line with its forecast of 3.5

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