S&P has highest close since Nov. 2007

Trader Peter Mancuso, center, works on the floor

Trader Peter Mancuso, center, works on the floor of the New York Stock Exchange Wednesday. (Feb. 6, 2013) (Credit: AP )

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The Standard & Poor's 500 index edged up to a five-year high Friday, extending a rally that started in January.

The S&P 500 rose 0.57 percent to 1,517.93, closing 0.3 percent up for the week. The index is at its highest since November 2007 and has advanced for six weeks, the longest streak of gains since August. The Dow Jones industrial average rose 48.92 points to 13,992.97. The Nasdaq composite climbed 0.91 percent to finish the week at 3,193.87.

The Dow had its best January in almost two decades, and closed above 14,000 on Feb. 1 for the first time since 2007. The index is up 6.8 percent so far this year; the S&P 500 is up 6.4 percent.

A last-minute budget deal in Washington to avoid the "fiscal cliff" of tax hikes and spending cuts helped power the rally, as did optimism about the housing sector and gradual improvements in the jobs market.

The S&P 500 finished the week higher despite logging its biggest daily decline in almost three months Monday following worrying news from Europe.

Largely positive corporate earnings reports and a report that showed that the U.S. trade deficit narrowed sharply in December provided more fuel for the market's advance Friday.

The trade deficit fell nearly 21 percent in December from November to $38.6 billion, the smallest in nearly three years, as exports rose while oil imports plummeted. The smaller trade gap means the economy likely performed better in the final three months of last year than first reported last week. -- AP

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