Stocks Mixed, But S&P 500 Hits Five-Year High

Volumes totaled 3.77 billion shares on the New York Stock Exchange and 1.85 billion shares on the Nasdaq. Advancing issues were outpacing decliners by a ratio of 1.9-to-1 on the Big Board, and 1.2-to-1 on the Nasdaq.

The University of Michigan consumer confidence index showed a read of 71.3 for January, falling from the final December print of 72.9. It was a big miss compared with the 75 level expected by economists and the weakest since December 2011.

"Escalation of the battle of wills in Washington surrounding the previous survey period saw both current and forward-looking expectations fall by the most in 21 months, and so far little respite is apparent in the current reading," Andrew Wilkinson, chief economic strategist at Miller Tabak, said of the consumer confidence report.

In earnings news, General Electric posted fourth-quarter earnings of 44 cents a share on revenue of $39.3 billion, compared with the average analyst estimate of 43 cents a share on revenue of $38.74 billion, as five of the seven industrial segments achieved double-digit earnings growth. Shares gained 3.5% on Friday.

"The outlook for developed markets remains uncertain, but we are seeing growth in China and the resource-rich countries," CEO Jeff Immelt said.

Intel exceeded analysts' fourth-quarter earnings estimates but issued guidance Thursday for the first quarter and 2013 below Wall Street views. Shares skidded 6.3%.

Morgan Stanley(MS) swung to a profit in the fourth quarter, beating expectations on equity trading and stronger performance from its wealth management unit. Shares surged 7.9% after the company's report Friday.

"Investors are less bullishly positioned into the 4Q reporting season compared to 2Q or 3Q," said Thomas Lee, chief U.S. equity strategist at JPMorgan, in a recent note. "Hedge funds have a beta of 0.104 compared to 0.249 at the start of 3Q earnings (Oct 2012), while the mutual fund beta at 0.655 is also lower than it was at that period last quarter. In other words, there is a greater potential for upside surprise compared to consensus views."

Major U.S. stock averages rallied Thursday, with the S&P 500 soaring to a five-year high, as better-than-expected economic reports outweighed disappointing quarterly results from Bank of America(BAC) and Citigroup(C) .