By MATT JARZEMSKY

Financial shares led major U.S. stocks indexes to five-year highs, putting the Dow industrials 1% away from their record close, amid upbeat earnings reports.

The Dow Jones Industrial Average added 47.46 points, or 0.3%, to 14018.70, its highest close since October 2007. The Standard & Poor's 500-stock index gained 2.42 points, or 0.2%, to 1519.43. The Nasdaq (NDAQ) Composite Index shed 5.51 points, or 0.2%, to 3186.49, as technology shares lagged behind.

WSJ Live's Paul Vigna reports traders have a wary eye on President Obama's agenda he'll lay out in his State of the Union address. Also, potential answers in Boeing's efforts to solve its Dreamliner fire problems.

WSJ Live's Paul Vigna has details on three stocks that traders will have their eyes on today. Photo: Getty Images

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Barclays (BCS)'s U.S.-listed shares jumped $1.72, or 9.1%, to $20.55, their steepest daily increase since November 2011, after the U.K. bank said it would cut several thousand jobs, mostly in its investment bank. Citigroup (C) rose 1.20, or 2.8%, to 44.35. E*Trade Financial (ETFC) increased 25 cents, or 2.3%, to 11.31.

Among decliners in tech, Apple (AAPL) fell 12.03, or 2.5%, to 467.90, following a three-session rally in the shares, the longest streak of daily gains since November. Chief Executive Tim Cook, speaking at an analyst conference, defended the company's distribution of cash to shareholders.

Avon Products (AVP) jumped 3.51, or 20%, to 20.79, leading the S&P 500, after the cosmetics vendor said its loss widened, but core earnings topped analysts' views. It also reported progress in stabilizing its sales and said it expects to repay a chunk of its debt in coming months.

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Michael Kors Holdings climbed 8.8% on better-than-expected earnings and an upbeat view. Above, the Kors shoe section at Macy's in New York.

"The early months of any year are often seasonally strong for the stock market, and this year was no exception," said Lawrence Creatura, portfolio manager at Federated Investors, which oversees $380 billion. "The important question is, were those gains earned? Based on the earnings results that we've gotten so far, it seems as though they were."

Investors awaited President Barack Obama's State of the Union address tonight. The president is expected to prod Congress to move to spur the economy and touch on immigration, gun control and climate change.

"Investors will be listening for any change of direction in the balance between taxation and spending," Mr. Creatura said.

On the economic front, the National Federation of Independent Business said its small-business optimism index for January rose less than economists had expected. Separately, the number of job openings in December edged down from a month earlier, the Labor Department reported.

European markets gained ground. The Stoxx Europe 600 added 0.5%, as European Union finance ministers met to discuss the euro zone's debt crisis and the recent rise in the euro.

Most Asian markets remained closed for the Lunar New Year holiday, but Japanese markets returned from a long weekend with a bang. Japan's Nikkei Stock Average surged 1.9% after Economic Minister Akira Amari suggested over the weekend that he would like to see the Nikkei reach 13000 by the end of the fiscal year on March 31.

Crude-oil prices gained 0.5%, to settle at $97.51 a barrel, while gold ticked up less than 0.1%, to settle at $1,648.70 a troy ounce. The dollar lost ground against the euro and yen. The 10-year Treasury note fell in price to yield 1.982%.

Among other stocks, Coca-Cola (KO) fell 1.05, or 2.7%, to 37.56, after reporting fourth-quarter revenue that fell short of analysts' expectations. The world's largest beverage company by sales sold more drinks globally but faces competition in Europe.

Michael Kors Holdings (KORS) leapt 5, or 8.8%, to 62, after the luxury-accessories seller reported fiscal third-quarter earnings and revenue that were well above expectations and gave an upbeat 2013 outlook.

Dun & Bradstreet (DNB) slid 6.60, or 7.7%, to 78.68, after the seller of business data reported quarterly earnings that missed analysts' views.

Facebook (FB) fell 89 cents, or 3.1%, to 27.37, after Bernstein Research lowered its rating on the shares to "market perform" from "outperform," saying the stock price already reflects most of the potential profit from the social network's mobile business.

StemCells (STEM) surged 34 cents, or 21%, to 1.99, on favorable results from a clinical trial of its treatment for spinal-cord injury.

Community-bank chain ConnectOne Bancorp rose 1.65, or 5.9%, to 29.65, on its first day of trading on the Nasdaq Stock Market.

Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com