Today: Strong retail earnings boosted financial markets, but Apple's (AAPL) freefall continues and it loses its crown as most valuable company. Also, Netflix (NFLX) continues its surge, Marissa Mayer lays out Yahoo's (YHOO) plans for success, and Cisco (CSCO) dumps another consumer unit.

S&P hits 5-year high, Apple continues to fall

The Standard & Poor's 500 closed above the symbolic 1,500 mark Friday for the first time in more than five years, and the index's eighth straight day of gains marked its longest winning streak since November 2004.

It was a day of at least half-percent gains across all three major markets; the Dow Jones industrial average rose more than 70 points, and the tech-heavy Nasdaq gained 19 points despite another day of losses for Apple. The S&P 500's gains were credited to encouraging earnings reports from two retail giants: Proctor & Gamble and Starbucks. Both companies' shares rose more than 4 percent during trading after reporting higher profits.

Meanwhile, two of Silicon Valley's highest-profile companies continued to move in opposite directions. Cupertino-based Apple dropped another 2.36 percent, or $10.65, a day after dropping 12 percent after failing to meet sky-high expectations in its earnings report Wednesday.

After nearly a year on top, Apple on Friday lost its place as the world's most valuable company, falling to No. 2, behind Exxon Mobile. Apple's market cap, which was a staggering $658.15 billion in September, now stands at $413.06 billion, a decrease of $245 billion. In just the past two days, Apple has lost almost $60 billion in value, an amount greater than the combined market cap of Hewlett-Packard (HPQ) and Yahoo.

Over in Los Gatos, however, the outlook was much sunnier. A day after surging 42 percent, its biggest one-day gain ever, Netflix shares rose another 15 percent, up $22.70, to close at $169.56, its highest point since September 2011. The video-on-demand company posted unexpected profits and customer gains in its earnings report Wednesday.

Financier Carl Icahn bought a 10 percent stake in the company in the fall, and has seen his investment double in the past few months. "A major sea change is going on in viewership which very strongly favors Netflix," Icahn said in an interview with Bloomberg News. "We still own every share we bought and we believe it's still got tremendous potential."

Mayer lays out Yahoo's mobile strategy

Yahoo CEO Marissa Mayer laid out her strategy to turn around the troubled Internet giant Friday, and made it clear that her focus will be on personalized mobile content.

During an interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland, Mayer said Yahoo hopes to use partnerships with other tech giants to personalize Internet content for users, who would be able to access that content on a variety of platforms.

"With the Web becoming so vast, there's so much content and there's so much social context, and now with mobile, there's so much location context and activity context," Mayer told Bloomberg. "The interesting way to take it is to bring some of that information . . . to actually make sense of the content. It's the internet ordered for you," she said. "That's interesting, because it actually brings Yahoo back to its roots — that's what Yahoo was — it took the Internet and ordered it up."

"I think that there's a real opportunity to help guide people's daily habits in terms of what content they read," Mayer said. "That is something that we are really working on. All of these daily habits -- news, sports, games, finance, search, mail, answers, groups -- these are all things we have been underinvested in."

Mayer acknowledged that Yahoo will need help to thrive in the booming mobile market. "Given that we do not have mobile hardware, a mobile OS, a browser, or a social network, how are we going to compete? Of the four horseman of the Internet . . . almost all of them are playing in one if not several of those medium. I think that the big piece here is that it really allows us to partner. Yahoo has always been a very friendly company. Our focus, in addition to technology, but also on media, it means there is an opportunity for strong partnerships. That is what we will be focused on."

Mayer told Bloomberg that recent breakthroughs in image and voice recognition have her excited about about a similar breakthrough in understanding context on the Internet, which she expects within the next three to five years. "Now it is a matter of being able to take personalized notions, things like likes on Facebook, tweets, articles you click on, taking all those signals and mapping those to understand, for example, I like clean energy on Facebook and I tweet out something about green energy, that is in fact the same interest as mine."

Since taking over the top spot at Sunnyvale-based Yahoo, Mayer has upgraded Yahoo Mail, revamped the Flickr photo service, bought mobile app startup Stamped and launched a recruiting drive to hire more mobile-savvy engineers. That's been encouraging to investors, as Yahoo shares have risen 30 percent since she took over last July. Yahoo will report its quarterly earnings Monday. Shares dipped slighty Friday, down 7 cents, or 0.34 percent, to $20.37, but still close to its 52-week high of $20.52.

Cisco continues to bail from consumer market

Cisco furthered its efforts to exit the consumer market Thursday, agreeing to sell its home networking unit, Linksys, to Belkin for an undisclosed sum. The deal will give Southern California-based Belkin about 30 percent of the U.S. home and small-business router market.

The San Jose networking giant has cut nearly 8,000 jobs and has steadily shed its consumer-focused products over the past two years, part of an effort to refocus on business clients. It has also made a series of acquisitions in recent months, including this week's $475 million purchase of Israeli wireless-network software maker Intucell.

Cisco may have bitten off more than it could chew when it bought Linksys in 2003, IDG News reported. "It's a very rare company that can actually have a strong consumer brand and corporate brand," Zeus Kerravala, of ZK Research, told IDG. "For Cisco to have done that, I think, would have required a much bigger shift in company strategy than they were willing to do."

But others say the move is an overreation by Cisco that it may come to regret. Noting that Cisco entered the consumer market a decade ago after its enterprise business started to stagnate, PC Magazine's Samara Lynn says, "Cisco's consumer division makes money, just not enough money. So Cisco's backpedaling and, in a panic, refocusing on its core enterprise networking roots.

"There's just one problem with this strategy," she says. As more companies move their data centers to cloud providers, "Cisco is going to find itself right back to facing stagnation again," as business networking consolidates.

Investors seemed to approve, however, as BMO Capital Markets on Friday reaffirmed its "outperform" rating. Cisco shares rose 13 cents Friday, or 0.62 percent, closing at $21.15.

Silicon Valley tech stocks

Up: Oracle (ORCL), Intel (INTC), Cisco, eBay (EBAY), Netflix, Facebook, Zynga, LinkedIn

Down: Apple, Google (GOOG), HP, Yahoo

The tech-heavy Nasdaq composite index: Up 19.33 , or 0.62 percent, to 3,149.71.

The blue chip Dow Jones industrial average: Up 70.65 or 0.51 percent, to 13.895.98.

And the widely watched Standard & Poor's 500 index: Up 8.14, or 0.54 percent, to 1,502.96.

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services.