NEW YORK – It’s the best start for stocks in 15 years.

In what was mostly a slow and steady climb, the Dow Jones industrial average rose 3.4 percent in January and the Standard & Poor’s 500 gained 4.4 percent, the best performances for both indexes to open a year since 1997.

Investors were encouraged by modest but welcome improvement in the U.S. economy, including an 8.5 percent unemployment rate, the lowest in almost three years. Corporate profits didn’t wow anyone — except Apple’s — but they were good enough.

“I don’t see anything really glamorous or tremendous about the economy or earnings,” said Jerry Harris, chief investment strategist at the brokerage Sterne Agee. “But I think they’re very acceptable, and things are grinding along.”

An unexpected drop in consumer confidence dragged stocks down on the final day of the month. The Dow Jones industrial average finished down 20.81 points, or 0.2 percent, at 12,632.91.

The broader market fared better. The S&P barely finished in the red, declining 0.60 point to 1,312.41. The Nasdaq composite index rose 1.90 points to close at 2,813.84. The Nasdaq gained 8 percent for the month, its best January since 2001.

In January 1997, the last time stocks had such a fast start, the S&P gained 6.1 percent. Bill Clinton was inaugurated for his second term. An Asian financial crisis and “Titanic” lay ahead. Later that year, the Dow crossed 7,000 and 8,000 for the first time.

This January, analysts said, investors had such low expectations for the economy that it was easy for things to turn out better than expected.

“There are no big surprises,” said Kim Caughey Forrest, a senior equity analyst at money manager Fort Capital Group. “That’s the kind of ho-hum economy that we are in right now.”

The Dow closed at 12,217.56 at the end of last year, then started this year with a pop — a gain of 179.82 points on opening day. It was the kind of big swing investors became accustomed to in 2011.

Since then, it’s been a quiet ascent: 19 days in a row of moves of less than 100 points. The last time the Dow had such a placid stretch was a 34-day run that started Dec. 3, 2010.

Scottrade, the online brokerage, said stock buyers outpaced sellers among its clients for the first 14 trading days of the year, Jan. 3 to Jan. 23. It also said volume was 16 percent higher than December’s average.

For the month, the Dow added 415.35 points, its fourth straight month of gains and its largest January point gain.

On Tuesday, the Dow started up 66 points after encouraging signs from Europe that Greece might finally complete a deal to cut its crushing debt, a step toward securing a critical euro130 billion bailout payment.

Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity.

Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal’s borrowing costs have risen to record highs.

The Dow lost its gains after consumer confidence fell to 61.1 in January, down from 64.8 in December. Economists had expected 68. The Conference Board said Americans are more worried about their incomes, gas prices and business conditions.

There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.

In the commodities market, investors worried that the confidence figure was a sign of weaker demand to come, and they sold industrial metals that have prices closely tied to the economy.

Copper for March delivery dropped 3.65 cents to $3.79 per pound, and March palladium ended down $2.15 at $686.35 per ounce. April platinum fell $28.20 to $1,588.10 an ounce.

The metals ended the day down after wild swings. Traders bid up prices in morning trading, encouraged by news that European officials were making progress to contain the financial crisis there, then sold hard on the confidence number.

“This is a day that every trader takes Tums,” said George Gero, vice president at RBC Global Futures.

Precious metal prices ended the day mixed. The price of gold rose, as it often does when it looks like the economy might shrink or the dollar might lose its value. Gold for April delivery gained $6 to finish at $1,740.40 an ounce.

In the bond market, the weak U.S. economic data and uncertainty about Greece lit up demand for safe investments. The benchmark 10-year Treasury yield dipped to 1.795 percent, its lowest close in almost four months.

The yield on the five-year Treasury note hit a record low for the second straight day, falling to 0.70 percent.

Treasury yields have been falling since last week, when the Federal Reserve said it expected to hold interest rates near zero into late 2014, more than a year longer than its last estimate, because the economic recovery will need help.

In corporate news:

• RadioShack Corp. stock plummeted 30 percent after the company said its profit fell sharply — 11 cents to 13 cents per share for the quarter that ended in December, down from 51 cents a year earlier and less than half what Wall Street was expecting.

• Best Buy Co. Inc., one of RadioShack’s competitors, responded by falling 5.6 percent, worst in the S&P. Both companies sell and service cellphones, but demand has softened at their stores.

• Avery Dennison Corp., which makes labels and packaging materials, fell 5.6 percent after it said earnings plunged 81 percent on nearly flat sales. Its 2012 outlook was well below Wall Street expectations.

• Mattel Inc. soared 5 percent because of strong demand for Barbie and Monster High dolls during the holidays. That boosted Mattel’s fourth-quarter profit by a better-than-expected 14 percent. The company also raised its dividend.

• U.S. Steel Corp. gained 5 percent after it reported strong demand for pipes from the oil industry from October through December. The company was also optimistic about this quarter.

• Agriculture conglomerate Archer Daniels Midland declined 3.6 percent after it reported an 89 percent drop in quarterly net income. The company said its results were weighed down by weakness in oilseeds, corn processing and agricultural services.

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AP Business Writers Stan Choe and Christopher Leonard contributed to this report.

BEST JANUARY: The Dow Jones industrial average and the Standard & Poor’s 500 each finished with their biggest January gains since 1997, despite falling slightly ton the last day of the month.

EUROPE PERSISTS: Greece appears close to a resolution on its bonds, with investors expected to take a 50 percent loss on face value. The worry now is that Portugal may need a similar deal with its creditors.

CONFIDENCE LOST: The Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. That’s not a good sign because consumers make up 70 percent of the economy and the recovery is leaning heavily on consumers to start spending and generating demand, which will lead to companies expanding and hiring.

NEW YORK – The stock market appeared headed Tuesday for its best January finish in more than a decade. An unexpected drop in consumer confidence dragged stocks down on the final day.

The Dow Jones industrial average was down 22 points at 12,631 just after 3 p.m. EST. The Standard & Poor’s 500 was down less than a point at 1,312. The Nasdaq composite index was up three at 2,814.

For the month, the S&P 500 is up 4.3 percent. That would be its best performance to start a year since a 6.1 percent gain in January 1997. Last year, the market added 2.3 percent in the first month.

Investors had such low expectations for the economy that it was easy for reports in January to come in better than expected, said Jerry Harris, chief investment strategist at the brokerage Sterne Agee.

But the news has mostly been good. Unemployment has fallen from a 10 percent peak in October 2009 to 8.5 percent, and the economy grew at a faster clip each quarter last year.

“I don’t see anything really glamorous or tremendous about the economy or earnings,” Harris said. “But I think they’re very acceptable, and things are grinding along.”

The Dow closed at 12,217.56 at the end of last year, then started this year with a pop — a gain of 179.82 points on opening day. It was the kind of big swing investors became accustomed to in 2011.

Since then, it’s been a quiet ascent: 19 days in a row of moves of less than 100 points. The last time the Dow had such a placid stretch was a 34-day run that started Dec. 3, 2010.

“Companies are reporting barely any increases in revenues and are just barely beating earnings forecasts. There are no big surprises,” said Kim Caughey Forrest, a senior equity analyst at money manager Fort Capital Group. “That’s the kind of ho-hum economy that we are in right now.”

On Tuesday, the Dow started up 66 points after encouraging signs from Europe that Greece might finally complete a deal to cut its crushing debt, a step toward securing a critical euro130 billion bailout payment.

Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity.

Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal’s borrowing costs have risen to record highs.

The Dow lost its gains after the Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. Economists had expected 68.

There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.

Six of the 10 major categories in the S&P 500 were lower for the day. Telecommunications stocks, financial stocks, utilities and information technology stocks managed small gains.

Avery Dennison Corp., which makes labels and packaging materials, was the worst performer in the S&P, down 5.7 percent, after it said earnings plunged 81 percent on nearly flat sales. Its 2012 outlook was well below Wall Street expectations.

In the bond market, the weak U.S. economic data and uncertainty about Greece lit up demand for safe investments. The benchmark 10-year Treasury yield dipped below its lowest closing level in nearly four months.

The yield on the five-year Treasury note hit a record low for the second straight day, falling to 0.71 percent.

Treasury yields have been falling since last week, when the Federal Reserve said it expected to hold interest rates near zero into late 2014, more than a year longer than its last estimate, because the economic recovery will need help.

RadioShack Corp. stock plummeted 28 percent after the company said its profit fell sharply — 11 cents to 13 cents per share for the quarter that ended in December, down from 51 cents a year earlier and less than half what Wall Street was expecting.

Best Buy Co. Inc., one of RadioShack’s competitors, responded by falling 5.2 percent, among the S&P worst. Both companies sell and service cellphones, but demand has softened at their stores.

Among other stocks in the news:

• Mattel Inc. soared 5.2 percent because of strong demand for Barbie and Monster High dolls during the holidays. That boosted Mattel’s fourth-quarter profit by a better-than-expected 14 percent. The company also raised its dividend.

• U.S. Steel Corp. gained 4 percent after it reported strong demand for pipes from the oil industry from October through December. The company was also optimistic about this quarter.

• Agriculture conglomerate Archer Daniels Midland declined 4.6 percent after it reported an 89 percent drop in quarterly net income. The company said its results were weighed down by weakness in oilseeds, corn processing and agricultural services.

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AP Business Writer Stan Choe contributed to this report.

NEW YORK – The stock market lost ground Tuesday but still appeared headed for its best January finish in more than a decade. An unexpected drop in consumer confidence dragged stocks down after a strong first half-hour.

The Dow Jones industrial average was down 42 points at 12,611 just after 11 a.m. EST. The Standard & Poor’s 500 was down three at 1,310. The Nasdaq composite index was down six at 2,805.

For the month, the S&P 500 is up 4.1 percent. That would be its best performance to start a year since a 4.1 percent gain in January 1999. Last year, the market added 2.3 percent in the first month.

The Dow had started the day up 66 points after encouraging signs from Europe that Greece might finally complete a deal to cut its crushing debt, a step toward securing a critical euro130 billion bailout payment.

Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity.

A large majority of countries in the European Union agreed late Monday to sign a treaty designed to stop overspending. Europe’s debt problems remain the main worry in the markets.

Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal’s borrowing costs have risen to record highs.

Back home in the United States, investors have enjoyed a steady climb through January amid signs of an improving economy. Unemployment has fallen from a 10 percent peak in October 2009 to 8.5 percent.

The Dow lost its gains after the Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. Economists had expected 68.

There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.

Among stocks making big moves:

• RadioShack Corp. stock plummeted 28 percent. The company said it earned 11 cents to 13 cents per share for the quarter that ended in December. That’s down from 51 cents a year earlier and less than half what Wall Street was expecting.

• Mattel Inc. soared 6 percent because of strong demand for Barbie and Monster High dolls during the holidays. That boosted Mattel’s fourth-quarter profit by a better-than-expected 14 percent. The company also raised its dividend.

• U.S. Steel Corp. gained 4 percent after it reported strong demand for pipes from the oil industry from October through December. The company was also optimistic about this quarter.

• Agriculture conglomerate Archer Daniels Midland declined 4 percent after it reported an 89 percent drop in quarterly net income. The company said its results were weighed down by weakness in oilseeds, corn processing and agricultural services.

NEW YORK (Reuters) – Stocks posted their best week since Christmas, even with a mixed finish on Friday after strong earnings from tech bellwethers IBM (IBM.N) and Intel (INTC.O) contrasted with Google's (GOOG.O) disappointing report.

The market heads into the most hectic week so far in this earnings season after a mixed start, with some worries over revenue and growth offset by sharp cost-cutting to protect the bottom line.

For the week, the Dow rose 2.4 percent and the S&P 500 gained 2 percent as investors showed some relief that earnings didn't reflect the worst elements that battered the market in the last year, especially given the problems in the euro zone that have been weighing on investor sentiment.

"For the time being, investors are pretty much taking earnings in stride. They knocked Google down this morning, but the general feeling in the marketplace is (stocks) are very undervalued at these levels, even given the marginal misses they're making in earnings," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Indeed, investors in recent weeks have been heartened by improving economic data, even though progress has been uneven. Reflecting improved economic sentiment, the Dow Jones Transportation Average, an indicator of the economy's strength (.DJT) has gained about 2 percent in each of the last two weeks.

IBM (IBM.N) lifted the Dow a day after it offered a strong outlook and results from several big-tech names signaled they were shaking off nervousness about economic growth and boosting technology spending. IBM's stock rose 4.4 percent to $188.52.

On the flip side, Google Inc (GOOG.O) slid 8.4 percent to $585.99. The Internet search giant's quarterly profit and revenue missed expectations on declining search advertising rates.

The Dow Jones industrial average (.DJI) gained 96.50 points, or 0.76 percent, to 12,720.48 at the close. The Standard & Poor's 500 Index (.SPX) inched up just 0.88 of a point, or 0.07 percent, to 1,315.38. But the Nasdaq Composite Index (.IXIC) dipped 1.63 points, or 0.06 percent, to close at 2,786.70.

NASDAQ UP ALMOST 3 PCT FOR WEEK

For the week, the Nasdaq climbed 2.8 percent, making this its best week in seven.

General Electric Co (GE.N) was unchanged at $19.15 after the conglomerate's revenues missed consensus forecasts. Fellow Dow component American Express Co (AXP.N) fell 1.8 percent to $50.04 as it set aside more money to cover bad loans.

Intel Corp (INTC.O) rose 2.9 percent to $26.38, while Microsoft Corp (MSFT.O) advanced 5.7 percent to $29.71. Both reported results late Thursday.

Still, in what could be seen as a more bearish sign for the earnings period, 60 percent of the S&P 500 companies that have reported results so far this earnings season have beaten profit expectations, below the 68 percent that beat estimates at this point in the reporting cycle for the third quarter and well below the 78 percent that exceeded estimates in the second quarter, according to Thomson Reuters data.

That's based on results from just 14 percent of the S&P 500 companies. But strategists say it could be a sign of what's in store for the rest of this earnings season and perhaps future quarters.

During the session, investors also kept an eye on Greece, where a bond-swap deal between the cash-strapped country and its private bondholders appeared to be close, according to sources. An agreement was deemed possible heading into the weekend. Creditors could lose up to 70 percent of the loans given to the fiscally troubled nation.

Hopes are an agreement would prevent the nation from spiraling into bankruptcy and bring some stability to the debt-strained euro zone.

Volume totaled about 7 billion shares traded on the New York Stock Exchange, the NYSE Amex and the Nasdaq, above the daily average of 6.68 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of not quite 3 to 2 while on the Nasdaq, about three stocks rose for every two that fell.

(Reporting By Caroline Valetkevitch; Editing by Jan Paschal)

NEW YORK – The best week for the stock market in more than two years ended with major indexes nearly unchanged on Friday.

A surprise drop in the U.S. unemployment rate sent stocks higher in early trading, but the gains fizzled throughout the afternoon. European stock indexes and the euro rose after German Chancellor Angela Merkel made a speech pushing for tighter rules on government spending.

The Dow Jones industrial average dropped 0.61 of a point to close at 12,019.42. The Dow ended the week up 7 percent, the largest weekly gain since July 2009.

Bank stocks rose the most. JPMorgan Chase & Co. jumped 6.1 percent, the most among the 30 stocks in the Dow average. Morgan Stanley leapt 6.9 percent, the second-biggest gain of any stock in the S&P 500 index.

The unemployment rate fell to 8.6 percent last month, the lowest level in 2 1/2 years. Economists had expected the rate to stay at 9 percent. But a key reason the unemployment rate fell so much was that more than 300,000 people gave up looking for work and were no longer counted as unemployed.

Germany’s Merkel said the 17 countries that use the euro must quickly restore market confidence by making financial controls stricter. Bond yields for Spain and Italy fell, a sign that investors are becoming more confident in the ability of those countries to pay their debt. France’s CAC-40 and Britain’s FT-SE each rose 1.1 percent.

The Nasdaq composite index inched up 0.73 to 2,626.93. The Standard & Poor’s 500 index fell 0.31 of a point to 1,244.28. The S&P surged 7.4 percent over the week, the most since March 2009.

Decisive steps by world leaders to right Europe’s teetering economy sent stocks soaring on Wednesday. The Dow jumped 490 points, its biggest gain since March 2009 and its seventh-largest one-day point gain in history. The weekly point gain of 787 in the Dow was the second-biggest in its history, following a 946-point gain in October 2008.

“This market has been gripped with fear for a long time,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “And I think some of these fear factors are beginning to dissipate.”

This week’s strong stock performance is partially a reflection of the market’s increased volatility since August, when concerns that Europe’s debt was spinning out of control made dramatic stock price swings the norm. On Monday the S&P 500 broke a 7-day slide that had taken the index down 7.9 percent.

The improvements in the U.S. job market are “another illustration that the US economy is, for now at least, shrugging off the global economic downturn and fears about the collapse of the euro-zone,” Capital Economics Chief U.S. Economist Paul Ashworth said in a note to clients.

Merkel and French President Nicolas Sarkozy will meet Monday to discuss changes to European Union treaties. The talks will culminate in a Dec. 9 summit of EU leaders, where the proposals are expected to be debated and detailed. Analysts say stricter controls on spending could encourage the European Central Bank to offer more short-term help for governments struggling with their debts.

If the European Central Bank takes a larger role in buying government debt, “it will certainly be a relief to markets,” Cardillo said, “and maybe even mean Europe avoids falling into a deep recession. Not that it’s going to cure all the problems of Europe.”

In corporate news:

• Western Digital Corp. soared 7.5 percent, the most in the S&P. The data storage provider raised its revenue estimate for the current quarter and said that recovery efforts at its facility in Thailand following massive flooding there were proceeding faster than had been expected.

• Big Lots Inc. slumped 8.7 percent, after the retailer reported a 76 percent plunge in income because of lower margins and a loss related to a newly acquired Canadian business. The company buys overstocked items including food and housewares and sells them at a discount.

• H&R Block Inc. fell 6.4 percent. The country’s largest tax-preparation company reported a wider quarterly loss late Thursday. H&R Block also said there was a jump in claims tied to bad loans made by its former subprime mortgage unit.

NEW YORK (Reuters) – Stocks rose on Friday, on course for their best week in almost three years, after the U.S. unemployment rate dropped to a 2-1/2 year low, but resistance close to a key technical level limited gains as traders booked profits before the weekend.

Improving U.S. economic data has heartened investors. U.S. companies stepped up hiring and the jobless rate dropped to 8.6 percent from 9 percent, further evidence the recovery was gaining momentum and U.S. equity markets may decouple from a likely recession in Europe.

The S&P 500 was up more than 8 percent for the week, its best weekly performance since March 2009.

Equities also got a boost after Bloomberg cited sources as saying the European Central Bank was gearing up to lend as much as 200 billion euros ($270 billion) to the International Monetary Fund in a bid to ease the debt crisis.

Financial shares were the biggest gainers on the day as the S&P financial index (.GSPF) rose 2.1 percent. JPMorgan Chase (JPM.N) gained 8 percent to $32.90.

"Everything is macro right now and we all know hedge funds and 'long onlys' are particularly uninvested, and the higher we go equals more pressure on them to play catch up," said Sam Ginzburg, head of capital markets at First New York Securities.

"Unless you have some macro event — which we probably will — the market can be directionally firm to higher into the end of the year, but again you're playing with fire."

The S&P 500 came within striking distance of its 200-day moving average, an important technical level, and turned briefly positive for the year before paring gains.

The Dow Jones industrial average (.DJI) gained 16.68 points, or 0.14 percent, to 12,036.71. The Standard & Poor's 500 Index (.SPX) rose 3.70 points, or 0.30 percent, to 1,248.28. The Nasdaq Composite Index (.IXIC) added 8.00 points, or 0.30 percent, to 2,634.20.

Stocks came off their highs as talk circulated among traders, ranging from a possible downgrade to credit ratings of Spain and Japan this weekend, a bill in the U.S. Congress to halt an IMF bailout of Europe, and military action in Iran.

"The people who want the market to come in, i.e., the shorts, are throwing stuff up against the wall to see if anything will stick," said Ginzburg.

None of the market talk was substantiated.

U.S.-listed shares of Research in Motion Ltd (RIM.TO)(RIMM.O) dropped 8.8 percent to $16.95 after the BlackBerry maker said it will record a pretax charge to write down the value of its poorly received PlayBook tablet computer.

Google Inc (GOOG.O) rose 1.1 percent to $620.77 after the Wall Street Journal reported the Internet group was pondering an Internet service to help consumers shop online with one-day delivery service to cut the loss of Web traffic to Amazon.com Inc (AMZN.O).

(Editing by Kenneth Barry)

DOW UP: The Dow Jones industrial average turned positive for the year as stronger retail sales helped drive stocks higher on Friday. The average of 30 large companies has shot up 9.3 percent since hitting 10,655 on Oct. 3, its lowest level of the year.

S&P’S WEEK: The Standard & Poor’s 500 index rose 20 points, or 1.7 percent, to close at 1,224. The index gained 6 percent this week, its best since July 2009.

GOOGLE THIS: Google Inc. shot up 5.8 percent to $591.68 after its quarterly income jumped 26 percent.