* China, German trade data signal growth in demand
* Narrower U.S. trade deficit should boost GDP
* Shares of LinkedIn surge after earnings, outlook
* Indexes up: Dow 0.3 pct; S&P 0.5 pct; Nasdaq 0.9 pct
By Angela Moon
NEW YORK, Feb 8 (Reuters) - U.S. stocks edged higher on
Friday, with the benchmark S&P index hitting a five-year high,
in the wake of a batch of encouraging domestic and international
Data showing stronger international trade in China and
Germany, and a report indicating the U.S. trade deficit had
narrowed in December, pointed to improving global demand.
The U.S. technology sector rose, boosted by gains in
LinkedIn Corp and AOL Inc following their
quarterly results, and in turn, lifting the Nasdaq.
Shares of LinkedIn jumped 22 percent to $151.81 after
announcing quarterly profits and giving a bullish forecast for
AOL Inc shares rose 7.1 percent to $33.62 after the
online company reported higher quarterly profit, boosted by a 13
percent rise in advertising sales.
The benchmark S&P 500, up more than 6 percent for the
year, is on track for six straight weeks of gains for the first
time since August 2012.
But an advance has been tougher in recent days as investors
await strong trading incentives to drive the index further
"The rally is definitely slowing down. We might see a record
high this year but we do need a bit of correction before going
there," said Randy Frederick, director of trading and
derivatives at Charles Schwab.
"We've been in this 1,516 level (for the S&P 500) for the
sixth straight session and need break above to really move
The Dow Jones industrial average was up 44.79 points,
or 0.32 percent, at 13,988.84. The Standard & Poor's 500 Index
was up 7.13 points, or 0.47 percent, at 1,516.52. The
Nasdaq Composite Index was up 29.51 points, or 0.93
percent, at 3,194.64.
The CBOE Volatility index, Wall Street's so-called
fear gauge, was down 4.2 percent at 12.94. The gauge, a key
measure of market expectations of short-term volatility,
generally moves inversely to the S&P 500.
Some analysts wondered if the market would convincingly
"I'm watching the 14 level closely" on the CBOE Volatility
index, said Bryan Sapp, senior trading analyst at Schaeffer's
Investment Research. "The break below it at the beginning of the
year signaled the sharp rally in January, and a rally back above
it could be a sign to exercise some caution."
Healthcare stocks climbed, with the Morgan Stanley
healthcare payor index up 2.3 percent. Molina Healthcare
Inc surged 9.7 percent to $31.67 as the biggest boost to
the index after posting fourth-quarter earnings.
McDonald's Corp said January sales at established
hamburger restaurants around the world fell 1.9 percent, a
steeper decline than analysts had expected. Still, shares edged
up 0.7 percent to $95.33.
Data showed Chinese exports grew more than expected in
January, while imports climbed 28.8 percent, highlighting robust
domestic demand, while German data showed a 2012 surplus that
was the nation's second highest in more than 60 years, an
indication of the underlying strength of Europe's biggest
Separately, U.S. economic data showed the trade deficit
shrank in December to $38.5 billion, its narrowest in nearly
three years, indicating the economy did much better in the
fourth quarter than initially estimated.
"The reason why this is so important is because the trade
deficit was a major contributor to the negative GDP report we
had in Q4. With today's number, we could see a reversal of this
in the next GDP report, going from negative to positive,"
On the earnings front, many companies beat estimates as
their profits grew.
According to Thomson Reuters data through Friday morning, of
339 companies in the S&P 500 that have reported earnings, 69.9
percent have exceeded analysts' expectations, above a 62 percent
average since 1994 and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies grew 5.2
percent, according to the data, above a 1.9 percent forecast at
the start of the earnings season.