Strong earnings from International Business Machines powered blue-chip stocks higher even as discouraging quarterly reports from other bellwethers kept a lid on broader market gains.

The Dow Jones Industrial Average rose 68 points, or 0.6%, to 12693. The Standard & Poor's 500-stock index declined two points, or 0.1%, to 1313, and the Nasdaq Composite slipped three points, or 0.1%, to 2785. Each were poised to finish with a third-straight weekly gain in late Friday's trading.

Blue-chip tech stocks pushed the Dow toward its fourth-straight gain. IBM rose 4.2% after reporting better-than-expected fourth-quarter earnings, and indicated that 2012 earnings would exceed current forecasts.

Microsoft advanced 5.2% after the company reported fiscal second-quarter earnings that beat expectations, with revenue essentially in line. The company also lowered its operating expense outlook for 2012.

Intel gained 2.2% after the chip maker topped fourth-quarter earnings and revenue forecasts, amid strength in the personal-computer business, and provided a first-quarter revenue outlook that was in line with current estimates.

"My sense is that [corporate earnings reports] so far seem to support that the idea that companies have a greater ability to sustain profits than had been anticipated," said Jeff Lancaster, principal at Bingham, Osborn & Scarborough, which manages over $2 billion in San Francisco.

Other widely followed tech stocks disappointed investors. Google fell 8.4% and was S&P 500's biggest laggard after reporting fourth-quarter earnings and revenue that fell short of expectations. The average cost that advertisers paid Google per click declined from year-ago levels. Despite Google's decline, technology stocks on the S&P 500 were one of three sectors in positive territory on Friday.

Elsewhere, GE recovered from early loses to edge higher. Shares gained 0.1% after the conglomerate's fourth-quarter earnings topped estimates but revenue came up short, with discontinued operations weighing on results.

American Express fell 2% after the company beat earnings estimates but revenue fell short of expectations.

Weakness in the credit service industry spilled into Capital One Financial. Shares slumped 6.7% after the credit card-issuer-turned bank reported disappointing fourth-quarter earnings as loan-loss provisions increased.

SunTrust bolstered the financial sector. Shares rose 5.2% after the regional bank announced fourth-quarter earnings slipped 16%, but that credit costs continued to decline.

"Finally, we're getting to a point where we push Europe to the back burner," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. "I had hoped that earnings season would take over the front page for investors, and so far it has."

Data on December's existing home sales did little to influence the market's direction. December's reading on existing homes showed a third-straight monthly increase, but sales rose less than expected. Existing-home sales increased 5% from an annual rate of 4.61 million. Economists surveyed by Dow Jones Newswires had expected home sales to rise by 5.2% to an annual rate of 4.65 million.

European markets slipped Friday, but managed to string together a fifth consecutive weekly gain. The Stoxx Europe 600 fell 0.3% and finished with the first decline in five sessions. Talks between Greece and its private creditors over a debt restructuring plan agreed to in October began, with reports suggesting an agreement with private creditors was close.

Asian bourses were broadly higher, as data showed that manufacturing activity in China contracted in January but at a slightly slower pace than in December. China's Shanghai Composite climbed 1%, and Japan's Nikkei Stock Average rallied 1.5%.

Gold futures rose 0.6% to $1,664.60 an ounce, while crude-oil futures slipped 1.7% to $98.89 a barrel. The U.S. dollar gained ground against both the euro and the yen.

Schlumberger climbed 0.8%. Fourth-quarter earnings rose 36% as the oil-field services company saw revenue jump in North America.

Skyworks climbed 11% after the semiconductor maker exceeded forecasts for fiscal first-quarter earnings and revenue, and indicated that second-quarter revenue would be above current estimates.

Fifth Third Bancorp slid 4.4% as the regional bank's fourth-quarter earnings and revenue missed expectations.

Intuitive Surgical reported that fourth-quarter earnings rose 25%, but the surgical-robot maker's shares dropped 6.7% on concerns about slowing growth in the number of procedures using its surgery machines.

-Chris Dieterich, Dow Jones Newswires; 212-416-2611; christopher.dieterich@dowjones.com

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