* New home sales fall in Dec. but 2012 sales stellar
* Procter & Gamble profit soars past expectations
* Exxon overtakes Apple in market cap
* Dow up 0.5 pct, S&P up 0.5 pct, Nasdaq up 0.6 pct
By Rodrigo Campos
NEW YORK, Jan 25 (Reuters) - The Standard & Poor's 500 index
closed above 1,500 for the first time in more than five years on
Friday as strong U.S. earnings reports, including Procter &
Gamble's, helped the benchmark extend its rally to eight days.
The winning streak is the longest in eight years and left
the S&P 500 about 4.1 percent away from its all-time closing
high of 1,565.15 on Oct. 9, 2007.
The equity market's strong start this year has been
attributed to solid corporate results, an agreement in
Washington to extend the government's borrowing power,
encouraging signs from the global economy and seasonal inflows
Procter & Gamble shares led the Dow and S&P higher
with a 4 percent gain to $73.25 after the world's top household
products maker's quarterly profit soared past expectations. The
company also raised its sales and earnings outlook for the
Sales of new U.S. single-family homes fell in December but
rose in 2012 to the highest level since 2009, a sign the U.S.
housing market turned a corner last year.
"Economic data in the U.S. has been trending higher, albeit
modestly. Things are incrementally better," said Quincy Krosby,
market strategist at Prudential Financial in Newark, New Jersey.
The Dow Jones industrial average rose 70.65 points or
0.51 percent, to close at 13,895.98. The S&P 500 gained
8.14 points or 0.54 percent, to 1,502.96. The Nasdaq Composite
added 19.33 points or 0.62 percent, to end at 3,149.71.
The S&P 500 closed at its highest since Dec. 10, 2007, and
the Dow ended at its highest since Oct. 31, 2007.
Apple shares dropped 2.4 percent to $439.88, and
the iPhone maker lost its coveted title as the largest U.S.
company by market capitalization to Exxon Mobil Corp.
Apple's market cap fell to $413 billion, down roughly $250
billion from its September peak. Apple's fall is about equal to
the entire value of Google Inc.
"The market was able to move forward despite deterioration
in Apple and that's also a positive," Prudential Financial's
There was heavy volume in Apple shares as it hit its session
low shortly before the closing bell. The stock dropped by as
much as $7, to $435 from $442, within the span of one second
during the last minute of trading.
More than 50 orders were executed on NYSE Arca at $435 a
share, according to Thomson Reuters time-and-sales data, in
blocks as small as 100 shares and as large as 10,494 shares.
Adding to the overall bullish tone in the market, German
business morale improved for a third consecutive month in
January to its highest in more than six months. In addition,
European banks said they will repay the European Central Bank
much more than expected of the loans the bank gave them during
"Good news in credit markets helps set the stage for (more
investment in) riskier assets," Krosby said.
For the week, the Dow rose 1.8 percent, the S&P 500 gained
1.1 percent and the Nasdaq added 0.5 percent. It was the fourth
straight week of gains for all three indexes.
Helping to lift the Nasdaq on Friday, Starbucks
rose 4.1 percent to $56.81 after the coffee retailer reported
stronger-than-expected sales in the United States and Asia.
Netflix added 15.5 percent to $169.56, following
its massive 42.2 percent jump on Thursday after the company
announced a surprising jump in subscribers to its video
Thomson Reuters data through Friday showed that of the 147
S&P 500 companies that have reported earnings so far, 68 percent
exceeded expectations. Since 1994, 62 percent of companies have
topped expectations, while the average over the past four
quarters stands at 65 percent.
Halliburton Co shares jumped 5.1 percent to $39.72
after the world's second-largest oilfield services company
reported higher-than-expected earnings and sales for the fourth
About 6.4 billion shares changed hands on the New York Stock
Exchange, the Nasdaq and NYSE MKT, below the daily average
during January 2012 of about 6.93 billion shares.
On the NYSE, more than three issues rose for every two that
fell. On the Nasdaq, five stocks advanced for every four that