New York Stock Exchange (photo courtesy of Creative Commons).

Microsoft, McDonald's, General Electric and other major U.S. corporations showed strong profits in the stock market Friday, except for Apple, whose 2.4% fall in shares brought Nasdaq down into the red. The Dow Jones was up 0.5%, the Standard & Poor 500 up 0.12% while Nasdaq was down 0.24%, according to Reuters.

Investors welcomed another round of strong earnings from corporate America and positive news out of Europe, reported CNN.

Encouraging news came in before the opening bell from Germany, where a reading on business confidence unexpectedly increased for the sixth straight month. The ripple effect helped turn around European markets, and boosted the euro and oil prices.

Over the past few months, the European Central Bank has pulled out all the stops to prevent a credit crunch by providing banks with €1 trillion in ultra-low cost financing. But the potency of the ECB's two long-term refinancing operations, or LTROs, appears to be fading, as yields on Spanish and Italian bonds have shot higher in recent weeks.

"The German economy is proving resilient," Ifo Institute president Hans-Werner Sinn told The Economic Times. 

Microsoft, McDonald's and General Electric all exceeded expectations in earnings. However, technology stocks generally lagged, said the Wall Street Journal.

The Nasdaq Composite gave early up gains and turned negative late Friday, falling 7.11 points, or 0.2%, to 3000.45, and extending declines into a third consecutive week.

Apple, which represents 12% of the Nasdaq's weight, tumbled 14.46, or 2.5%, to 572.98 and was down for a third straight session. The stock remains up more than 40% this year, but this week's 5.3% tumble was the worst since October. The stock is down 12% since its intraday high hit on April 10.

"Sometimes price creates stories rather than stories creating price," said John Manley, chief equity strategist at Wells Fargo's funds-management unit. "Stocks will go down after having gone up, and people will look around and say, 'something's going wrong.' You've got to be aware of that sort of possibility whenever you're looking at a situation like this."

The AP reported that flash memory maker SanDisk Corp was S&P's biggest loser, plummeting 11 percent and is expecting the trend to continue.

According to Reuters, analysts said the weakness of Friday's close was partly because of caution ahead of an early indicator of China's industrial activity, expected late Sunday.

"We already know earnings are coming in better, and the market has been up quite a bit," said Doreen Mogavero, president and chief executive of Mogavero Lee & Co. in New York.

"The private-sector manufacturing data from China will be setting the pace for next week, so people are taking some profits off the table," she said.

A weaker level in China's HSBC flash purchasing managers index late in March sent equity and other risk markets lower.

Daily Finance attributed raised oil prices Friday to the encouraging news out of Germany.

Reach Executive Producer Rosa Trieu here. Follow her on Twitter.