San Francisco Frontiers - Stock markets diverge as investors track earnings

The Dow fell at the open but the tech-heavy Nasdaq advanced and the S&P 500 jumped above 5,000 points, which it had briefly touched the day before.

"The fourth quarter earnings season is proving to be a positive factor for investors," said David Morrison, senior market analyst at financial services provider Trade Nation.

"Absenting a few shockers, the majority of corporations have beaten expectations for both earnings and revenues, even though those expectations were fairly low to begin with," he added.

US equities have marched higher as strong earnings along with data showing resilience in the world's number one economy helped overcome Federal Reserve warnings that interest rates will not come down as early as hoped.

"Investors have taken encouragement from hearing large dollops of positive guidance from company executives for the year ahead," Morrison said.

Figures released Thursday showing below-expectation US jobless claims reinforced the view that the labour market remains in good health despite interest rates sitting at two-decade highs, but gave the central bank room to hold borrowing costs where they are for longer.

The Fed hiked rates to a two-decade high last year in efforts to tame inflation.

Consumer price index report on Friday showed a downward revision in December to 0.2 percent on a monthly basis from 0.3 percent previously. Traders now turn their attention to the January CPI next week.

Among individual stocks, Expedia shares dropped almost 20 percent as it reported lower earnings compared with the year-ago period.

PepsiCo fell almost four percent after the snacks and soft drinks company reported a drop in fourth-quarter sales.

Major tech stocks were mostly higher on the back of largely positive earnings reports this week.

European stock markets were in the red in afternoon deals.

French luxury giant Hermes bucked the trend, its shares rising almost five percent after posting record annual sales and net profit.

The gains propelled the group above L'Oreal as France's second biggest company in terms of market value as the cosmetics company's stock price fell almost seven percent after it posted lower-than-expected results for the fourth quarter.

- Key figures around 1550 GMT -

New York - Dow: DOWN 0.1 percent at 38,677.50 points

New York - S&P 500: UP 0.1 percent at 5,005.02

New York - Nasdaq: UP 0.4 percent at 15,856.20

London - FTSE 100: DOWN 0.1 percent at 7,587.29

Paris - CAC 40: DOWN 0.3 percent at 7,642.15

Frankfurt - DAX: DOWN 0.2 percent at 16,922.95

EURO STOXX 50: FLAT at 4,709.04

Tokyo - Nikkei 225: UP 0.1 percent at 36,897.42 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 15,746.58 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: UP at $1.0785 from $1.0781 on Thursday

Dollar/yen: UP at 149.31 yen from 149.30 yen

Pound/dollar: UP at $1.2636 from $1.2620

Euro/pound: DOWN at 85.35 pence from 85.40 pence

West Texas Intermediate: UP 1.3 percent at $77.21 per barrel

Brent North Sea Crude: UP 0.9 percent at $82.37 per barrel

burs-lth/

A.Clark--SFF