US Markets

Stocks advanced Friday, as blowout earnings from Google and a big corporate takeover overshadowed another warning about the U.S.'s credit rating and a depressed reading on consumer sentiment. The Dow Jones Industrial Average rose 42.61 points, or 0.3%, to 12479.73. The blue-chip index bobbed between positive and negative territory much of the day before the late rise.

[Kick off your day with Global Markets Daily]

Caterpillar led the industrials higher, gaining $1.78, or 1.7%, to 109.36. For the week, the Dow finished down 1.4%. It has declined in eight out of the last 11 weeks. The Standard & Poor's 500-stock index rose 7.27 points, or 0.56%, to 1316.14. It dropped 2.1% for the week. The energy sector was the biggest gainer Friday, rising 2.3% amid a rise in crude oil prices as well as merger-and-acquisition activity.

Petrohawk Energy soared 14.68, or 62%, to 38.17, after Australia's BHP Billiton agreed to buy the company in a deal valued at more than $15 billion, including debt.

The Nasdaq Composite Index rose 27.13 points, or 1%, to 2789.80, fueled by Google's upbeat quarterly report. The technology-oriented index dropped 2.5% this week, snapping a three week winning streak. The internet-search giant late Thursday posted a surprisingly robust 36% jump in quarterly profit on record revenue. Google's shares surged 68.68, or 13%, to 597.62.

Investor optimism withstood a warning from Standard & Poor's late Thursday on U.S. debt. The credit rater said there is a 50% chance it would lower the AAA bond rating on U.S. debt within three months. The threat of a possible downgrade comes as the debate over raising the debt ceiling has lasted longer than expected.

House Republicans said Friday they planned to vote in the coming week on a proposal to raise the debt ceiling by $2.4 trillion, with matching cuts and guidelines to control future government spending.

Financial stocks were among the worst decliners in the S&P 500. Citigroup slumped 64 cents, or 1.6%, to 38.38, reversing an earlier advance. The bank's second-quarter profit jumped 24%, but it struggled to increase earnings in many businesses around the world, which diminished investor appetite for the stock.

J.P. Morgan Chase was one of the worst DJIA performers, falling 37 cents, or 0.9%, to 39.98, just one day after it reported a strong quarterly profit and surging revenue from investment banking operations.

Stocks also had a muted reaction to the European bank stress tests. Eight banks flunked the European Union's evaluations, although analysts and investors were bracing for as many as 20 banks to fail.

EUROPEAN Markets

European stock markets finished lower Friday after data showed a big drop in U.S. consumer sentiment and ahead of the release of bank-stress-test results. The pan-European Stoxx 600 index fell 0.3% to end at 266.91. For the week, the index was down 2.5%. Downbeat economic data overshadowed strong corporate earnings from companies such as Citigroup Inc. The Thomson Reuters/University of Michigan index of consumer sentiment fell sharply in July, data indicated and soured investors' mood.

Among the biggest decliners in Europe was Temenos Group AG. Its shares tumbled 20% in Zurich after the provider of banking-software systems lowered its full-year license outlook, saying banks face uncertainty and are unwilling to take decisions about large capital projects. In France, the CAC 40 index dropped 0.7% to 3,726.59, while Germany's DAX 30 index edged up 0.1% to 7,220.12. Banking shares moved lower ahead of the stress-test announcement. In Paris, Natixis dropped 3% and Credit Agricole sank 3.1%.

In Frankfurt, Commerzbank AG fell 3% and Deutsche Bank AG declined 1.5%. ING Group dropped 2.4% in Amsterdam. In Zurich, shares of Credit Suisse Group AG dropped 1.5% after the bank said it is the target of a Department of Justice investigation into private-banking services provided to Americans. Peripheral markets posted steeper losses than core European markets; worries have grown in recent days that the euro-zone debt crisis may spread to bigger economies such as Italy and Spain.

Italy's FTSE MIB index fell 1% to 18,450.45, with Intesa Sanpaolo SpA down 1.5%. Spain's IBEX 35 index dropped 1.2% to 9,484.20, with BBVA down 1.6%. The U.K.'s FTSE 100 index closed down 0.06% at 5,843.66. Luxury-goods firm Burberry Group PLC rallied 4.2%, as Citigroup raised its price target on the stock. Shares of Fresnillo PLC rose 1.9% after J.P. Morgan Cazenove upgraded the silver miner to overweight from neutral.

Shares of BHP Billiton PLC fell 1.9% after the miner said it will acquire Petrohawk Energy Corp. for $12.1 billion in cash. Rolls-Royce Holdings PLC fell 2.5%. UBS downgraded the engine maker to sell from neutral, citing weakness in the outlook for offshore vessels.

ASIAN Markets

Asian stocks ended mixed Friday as caution over another ratings agency warning on U.S. government debt offset optimism on solid U.S. corporate earnings. BHP Billiton shares fell in Sydney after it announced a $15 billion-plus deal to buy U.S. shale gas producer Petrohawk Energy. Chinese property developers tumbled, pulling Hong Kong shares lower and capping gains in Shanghai after Beijing broadened restrictions on home purchases to include some second and third-tier cities.

Japan's Nikkei Stock Average rose 0.4% to 9974.47, China's Shanghai Composite gained 0.4% to 2820.17, South Korea's Kospi added 0.7% to 2145.20 and Taiwan's Taiex rallied 1.1% to 8574.91. On the downside, Hong Kong's Hang Seng Index declined 0.3% to 21875.38.

The Bombay Stock Exchange's Sensitive Index fell 0.3% to 18,561.92, ending the week 1.6% lower after three consecutive weeks of gains. The region's shares were bolstered by good quarterly results from Google and J.P. Morgan Chase, but U.S. debt fears kept gains in check. Standard & Poor's Ratings Services Thursday put U.S. sovereign ratings on formal credit watch, saying there was.

Traders were also cautious ahead of the results of the second round of European bank stress tests, due Friday after local markets close.

In Tokyo, some exporters were higher, getting a fillip as the dollar mostly stayed above Y79. Canon rose 0.9%, and Sony added 0.7%.

Internet firms gained, with Yahoo Japan up 1.8%, after shares in Google surged in after-hours trading after a better than expected earnings report. Trend Micro added 0.8%. But Chinese property stocks suffered deep losses in Hong Kong, where China Overseas Land & Investment shed 4.9% and China Resources Land lost 2.9%. In Shanghai, Poly Real Estate Group was down 2.8% and Gemdale fell 1.9%.

BASE Metals

Base metals closed mixed on the London Metal Exchange Friday after a choppy trading session that saw prices struggle to break out of relatively tight ranges. At the close, LME three-month copper was 0.5% higher at $9,672 a metric ton, slightly encouraged by reports of a small growth in U.S. industrial production in June, a trade player said.

The Federal Reserve said industrial production increased by 0.2% in June, just missing consensus estimates of a 0.3% rise. Capacity utilization was unchanged from May at 76.7%. Of the metals that closed in negative territory, tin saw the steepest losses, closing 0.8% lower at $27,200/ton.

Crude oil futures prices capped a topsy-turvy week with a 1.6% rise to above $97 a barrel, on expectations that U.S. Federal Reserve board policy will continue to support the underlying strength in oil. Light, sweet crude oil futures for August delivery on the New York Mercantile Exchange settled $1.55 a barrel higher at $97.24 a barrel. September ICE Brent crude oil settled $1 a barrel higher at $117.26 a barrel.

Gold capped a nine day winning streak with a record settlement, while silver made steady gains, as bleaker U.S. consumer sentiment and government debt concerns in Europe and the U.S. roused investor demand for a safe haven. The most actively traded contract, for August delivery, gained 80 cents, or 0.1%, to settle at a record $1,590.10 a troy ounce on the Comex division of the New York Mercantile Exchange.

The contract hit an intraday record of $1,594.90 Thursday and ended the week up 3%. Thinly traded July-delivery gold also settled at a record, up 80 cents, or 0.1% at $1,589.80 a troy ounce. The contract hadn't traded during floor hours, and also ends the week up 3%.

More from IBT Markets:
Subscribe to get this delivered to your inbox daily
Follow us on Facebook.
Follow us on Twitter.