Stocks Gain on Earnings, Weaker Dollar

Better than expected news from Disney and J.C. Penney lifted sentiment Friday, as did a fresh decline in the greenback

U.S. stocks closed higher Friday, scoring a second consecutive weekly advance, as stronger-than-expected earnings news from media giant Walt Disney Co. and retailers Abercrombie & Fitch (ANF) and J.C. Penney (JCP) helped to reassure investors' faith in the economy.

Consumer discretionary issues were among the session's top performers, even though the latest University of Michigan survey showed a decline in consumer sentiment in November.

Additional support for the stock market, as well as gold futures, came from a weaker dollar.

On Friday, the 30-stock Dow Jones industrial average finished higher by 73.00 points, or 0.72%, at 10,270.47. The broad Standard & Poor's 500-stock index was up 6.24 points, or 0.57%, at 1,093.48. The tech-heavy Nasdaq composite index gained 18.86 points, or 0.88%, to 2,167.88.

On the New York Stock Exchange, 22 stocks were higher in price for every eight that declined. Breadth on the Nasdaq was 18-9 positive. Trading volume was relatively low.

Treasuries rose. Crude oil futures fell.

Traders were awaiting Monday's U.S. October retail sales report for guidance after the decline in the Michigan Consumer Sentiment index.

Other key reports next week: the Empire State index for November and business inventories for September on Monday; the October producer price index (PPI) and industrial production reports on Tuesday; the October consumer price index (CPI) and housing starts releases on Wednesday; and weekly initial jobless claims, the index of leading economic indicators for October, and the November Philadelphia Fed index on Thursday.

In economic news Friday, U.S. consumer sentiment dropped to 66.0 in the preliminary November report from the University of Michigan, compared to a 70.6 in October. The index has declined from this year's high at 73.5 in September, though it's still better than last November's 55.3. The current conditions index fell to 69.6 from October's 73.7 (57.5 last November) The future economic outlook index declined to 63.7 from 68.6 in October (and 53.9 last year).

The U.S. trade deficit widened 18.2% to $36.5 billion in in September, worse than expected, from a revised $30.8 billion shortfall in August (from a $30.7 billion deficit). The 18% increase in the deficit is the biggest in ten years. Excluding petroleum, the deficit widened to $15.9 billion compared to an August deficit of $14.3 billion previously. Imports rebounded a strong 5.8% following a 0.4% drop in August. Exports rose 2.9% following a modest 0.2% increase in August.

U.S. import prices rose 0.7% in October, while export prices rebounded 0.3%. The 0.1% gain in September import prices was revised up to 0.2% from 0.1%, but August's 1.6% gain was bumped down to 1.5%. Excluding petroleum, import prices were up 0.7% after a 0.4% increase in September. Export prices for September were revised to -0.2% from -0.3%. Excluding agriculture, export prices rose 0.3% from a revised 0.1% increase in September (was unchanged previously).

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