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Stocks rise on earnings; S&P 500 hits new high, best week in 3 months

Stocks closed out the week in positive territory, with the S&P 500 extending gains to a new high, as Wall Street cheered some better-than-expected corporate earnings results.

All three major averages logged strong gains for the week, with the S&P 500 and Nasdaq posting their best weekly rally in three months.

Google soared more than 13 percent to top $1000 a share for the first time, after the search-engine giant posted better-than-expected earnings.

The Dow Jones Industrial Average closed 28 points higher after fluctuating between small gains and losses for most of the session. General Electric and Caterpillar led the top performers. The blue-chip index traded within 2 percent of its all-time high set in September.

The S&P 500 hit a new intraday record of 1,745.32. And the Nasdaq also finished in positive territory, hitting a fresh 13-year high. The small-cap Russell 2000 index and the S&P midcap 400 index also pushed to record highs.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.

Most key S&P sectors ended in positive territory, boosted by techs and industrials, while health care lagged.

Among earnings, General Electric gained 3.5 percent to top the Dow gainers after the conglomerate posted earnings that topped expectations, though revenue fell slightly short of estimates.

Morgan Stanley gained after the financial giant posted a higher-than-expected earnings as revenue soared nearly 30 percent, fueled by equities trading and the wealth management business.

Chipotle Mexican Grill spiked to lead the S&P 500 gainers after the fast-casual restaurant chain posted better-than-expected sales and said it may lift prices in the middle of 2014 to offset higher food costs.

So far, 85 S&P 500 companies have reported quarterly results, with earnings topping expectations by an average of 4.2 percent, according to Thomson Reuters.

Chicago Federal Reserve Bank President Charles Evans said that he doesn't see any economic signs that allow the central bank to make a move to reduce its massive bond-buying program.

"My own personal view is, I don't think that we have enough positive additional information going into the next meeting to all of a sudden decide that it's appropriate to taper," said Evans.

Trader Todd Horwitz, the author and founder of Averagejoeoptions.com, said he did not expect the Fed to start tapering its bond buying program for another year. That explained the move higher on stock markets despite a lackluster economy.

"This free flow of money is going to continue..It's Monopoly money, that's what we're playing with," he told CNBC. "The average guy can't get that money but the big guys can get all they want."

Lindsey Piegza, chief economist at Sterne Agee said the budget deal left an overhang of uncertainty for consumers. "We still don't have a long-term outlook," she said, warning that this will keep businesses and consumers on the sidelines.

And next week brings a deluge of data following delays due to the partial government shutdown. The closely-watched non-farm payrolls for September will be released on Tuesday.

Markets in Asia and Europe were also buoyed by the news that China's economy grew 7.8 percent in the third quarter. The yuan hit a record high for a fifth consecutive day against the weak U.S. dollar.