Deal talks and earnings results sparked sharp moves in individual stocks, while the broader market was steady.
The S&P 500 was little changed Friday but notched a weekly gain. Major indexes have swung between relatively small losses and gains in recent sessions, and daily stock-trading volumes have been below the 2016 average.
On Friday, the Dow Jones Industrial Average fell 17 points, or 0.1%, to 18146. The S&P 500 slipped less than 0.1% and gained 0.4% for the week. The Nasdaq Composite rose 0.3% Friday.
Microsoft shares rose 4.3%, closing above their record level of $59.56 hit during the dot-com boom in 1999, after the company beat forecasts for both sales and profit Thursday.
Shares of Time Warner rose 7.8% after The Wall Street Journal reported that AT&T was in advanced discussions to acquire the media company. Shares of AT&T fell 3%. Verizon Communications, which announced lower quarterly revenue and falling subscriber growth Thursday, fell 1.9%.
Verizon and AT&T dragged down the telecommunications sector of the S&P 500, which led declines with a 2.3% drop. The consumer-discretionary sector, which includes Time Warner, led gains with a 0.8% rise.
Shares of Reynolds American added 14% after cigarette giant British American Tobacco said it made a $47 billion takeover offer for the remaining stake in its U.S. peer. Shares of British American Tobacco fell 2.9% in Europe.
Shares of PayPal Holdings surged 10% as the company reported profit and revenue Thursday that beat analyst expectations. The payments company also said it struck an agreement with Alibaba Group Holding to make PayPal a one-click payment option for the Chinese e-commerce giant’s consumers.
General Electric fell 0.3% as its oil and gas business continued to weigh on revenue growth in the most recent quarter.
Earnings season has been driving much of the action in the U.S. stock market lately. Roughly a quarter of S&P 500 companies have reported so far, and earnings are on track to decline 0.3% from a year earlier, according to FactSet. That is an improvement from the 2.1% decline projected by analysts on Sept. 30.
“The macro factors are always going to be in place but it’s going to be pretty quiet between now and the elections,” said Trip Miller, managing partner of Memphis, Tenn.-based hedge fund Gullane Capital Partners. Investors will be “paying more attention to the earnings cycle,” he said.
Overseas, the Stoxx Europe 600 was unchanged Friday but rose 1.3% for the week, led by a recovery in the banking sector. Financial shares have risen in the U.S. as well, with the KBW Nasdaq Bank Index of large U.S. commercial lenders on track for a 3.5% weekly gain.
The U.S. dollar continued its rally amid expectations that the Federal Reserve would raise interest rates in December. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was up 0.2% Friday.
The Shanghai Composite Index inched up 0.2% for a weekly gain of 0.9%.
Japan’s Nikkei Stock Average declined 0.3% for the day but rose nearly 2% this week, while Australia’s S&P/ASX 200 shed 0.2% to end the week little changed.
The Hong Kong stock market was closed as the city shut down for a typhoon.