Wall St gains on earnings; Google surges to record high

By Angela Moon

NEW YORK (Reuters) - The S&P 500 index climbed to a new high at the start of trading Friday and was on track for its best weekly gain in more than three months, boosted by earnings from big companies like Google and Morgan Stanley.

Among top gainers was Google Inc, which surged to a record of $1,000 a share, a day after delivering better-than-expected results. The company is the second in the S&P 500 to trade at this level, following on the heels of Priceline.com, which was trading Friday at $1,052, up nearly 2 percent.

Morgan Stanley shares rose 2.7 percent to $29.72 after the company reported a 50 percent rise in quarterly revenue as higher income from equities sales and trading offset a drop in its fixed-income business.

General Electric Co shares rose 2.7 percent to $25.33 following results, and was the biggest boost to the blue chip Dow index, although declines in Home Depot and Microsoft kept the Dow gains in check.

GE said its third-quarter profit and revenue fell amid a shrinking finance business and negative effects of foreign currency, but Wall Street looked beyond the revenue drop to GE's improving profit margins and growing order demand.

"It seems like we just march upwards, and when we get little pullbacks like the one we saw at the open on the Dow, the market bounces right back," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

"The focus is off problems in Washington for now, and refocused on earnings, and when a company like Google surprises, it's a huge plus."

The Dow Jones industrial average was up 0.13 points, or 0.00 percent, at 15,371.78. The Standard & Poor's 500 Index was up 6.41 points, or 0.37 percent, at 1,739.56. The Nasdaq Composite Index was up 28.85 points, or 0.75 percent, at 3,891.99.

The S&P 500 climbed to a fresh high Friday, adding to its previous record Thursday, which was spurred by mounting investor confidence in the wake of a last-minute deal by U.S. lawmakers to avoid a debt default.

So far, 85 companies representing 25.8 percent of S&P 500's market capitalization have reported, with earnings beating estimates by an average of 4.2 percent, according to RBC Capital Markets.

Also boosting market sentiment, data showed third-quarter growth in China, the world's second-biggest economy, grew 7.8 percent from a year ago, its quickest pace for the year, thanks largely to investment.

A number of Federal Reserve officials are due to speak throughout the day, including U.S. Federal Reserve Governor Daniel Tarullo and New York Fed President William Dudley at a Fed conference on resolution of systematically important banks in Washington.

(Editing by Bernadette Baum)