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The financing, $1 billion of which is from Goldman Sachs' overseas clients and $500 million from Goldman itself and Russian investment firm Digital Sky Technologies, gives the company a projected value of $50 billion, setting the stage for what could be one of the largest initial public offerings next year.

Facebook, founded in a Harvard dorm room in 2004, said it would begin to file public financial reports no later than April 30, 2012, in a statement detailing the new investment.

United States securities regulations require companies with more than 499 shareholders to disclose financial information whether they are publicly traded or not. Facebook expects to exceed that number some time this year.

The new funding was organized by investment bank Goldman Sachs, which raised $1 billion from non-U.S. investors in a fund that Facebook said was oversubscribed.

Goldman Sachs originally pitched the investment to U.S. investors, but switched focus to overseas clients as concerns grew that intense media coverage surrounding the offering could run afoul of U.S. securities laws.

Initial projections from Goldman Sachs in documents circulated to potential investors earlier this month indicated it was looking to raise up to $1.5 billion.

Facebook said it made a "business decision" to limit the offering to $1 billion, without explaining further. It said it had no immediate plans for using the money raised.

The company earned $355 million in net income in the first nine months of 2010 on revenue of $1.2 billion, according to a document distributed by Goldman Sachs to potential investors earlier this month, the only source of financial data on the company.

In December, Digital Sky Technologies, Goldman Sachs and some funds managed by Goldman invested $500 million in Facebook.

Facebook has more than 500 million users and is challenging big Web businesses like Google Inc and Yahoo Inc for users' time online and for advertising dollars.

Investors are increasingly eager to buy shares of Facebook and other fast-growing Internet social networking companies on private exchanges.

(Reporting by Bill Rigby; Editing by Bernard Orr)

General Electric Co (GE.N) was the top gainer on the Dow index, up 4.5 percent at $19.28. The world's biggest maker of electric turbines and jet engines, reported better-than-expected earnings, helped by the recovery of its finance arm and a rise in revenue at its industrial units, including a sharp pickup in sales of locomotives.

Google Inc (GOOG.O) shares rose 1.4 percent at $635.80 after the company reported better-than-expected net revenue for its fourth quarter, after markets closed on Thursday.

"There is still a lot of liquidity going into the market, especially after pulling back for a day or two," said Doug Roberts, chief market strategist for Channel Capital Research in New Jersey.

The Dow Jones industrial average .DJI was up 53.81 points, or 0.46 percent, at 11,876.61. The Standard & Poor's 500 Index .SPX was up 6.78 points, or 0.53 percent, at 1,287.04. The Nasdaq Composite Index .IXIC was up 10.90 points, or 0.40 percent, at 2,715.19.

Shares of Bank of America Corp (BAC.N) fell 1.4 percent to $14.33 after the largest U.S. bank by assets reported a second straight quarterly loss, driven by a $2 billion write-down in its mortgage business.

(Editing by Padraic Cassidy)

Bank of America's Merrill Lynch businesses -- including retail brokerage and investment banking -- were profitable but did not make enough money to overcome the bank's massive losses from mortgages.

As the financial crisis was ramping up, then Chief Executive Kenneth Lewis bought Countrywide Financial Inc for $4.2 billion. Current CEO Brian Moynihan is still coping with the aftermath.

In the fourth quarter, the bank took a writedown of $2 billion to recognize the declining value of Countrywide. The bank also set aside $4.1 billion for legal costs linked to home loans it is buying back from investors, or is likely to buy back.

"Countrywide is still hurting them and it will continue to. It's like a tooth being pulled -- it's only going to feel good when it's done," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel Inc in Cincinnati, which does not own Bank of America shares.

Bank of America's home loan business has lost more than $12 billion since the beginning of 2009. Chief Financial Officer Charles Noski said on a conference call that the bank may have to set aside another $7 billion to $10 billion to cover legal settlements with mortgage investors.

CEO Moynihan, speaking on financial news network CNBC, said the U.S. housing market would continue to bump along the bottom, and the banking industry would be dealing with related problems for years to come.

Mortgages are hurting the bank, but financial regulation could also weigh on future results, bank officials said. Noski said a new law limiting the fees that big banks can charge merchants for processing debit card transactions could cost Bank of America about $1 billion of revenue starting in the second half of 2011.

The bank has suffered from its Countrywide purchase, but its acquisition of Merrill Lynch has helped. Bank of America's global banking and markets unit, combined with its global wealth and investment management arm, which includes Merrill Lynch's investment bank operations and retail brokerage, earned $1.06 billion in the fourth quarter.

"Merrill worked out much better than you would have thought," said Mike Holland, founder of Holland & Co, which oversees more than $4 billion of assets.

Bank of America shares were up 0.3 percent to $14.58 in early trading.

CHARGES WEIGH

The fourth quarter was the second straight to include large one-time charges for the bank, and pushed it to a second straight quarterly loss after two consecutive quarterly profits for first-year CEO Moynihan.

In the third quarter, the bank reported a $10 billion writedown of its cards business due to new curbs on debit card fees banks can charge merchants.

Moynihan is trying to turn around a bank cobbled together by Lewis primarily through acquisitions over the last decade. Moynihan is a former FleetBoston executive, a bank that BofA bought in 2003.

A rebound in demand for railroad locomotives and a rise in sales of medical imaging devices helped the largest U.S. conglomerate top Wall Street's expectations. GE also noted that orders were up 12 percent in the quarter, driving its order backlog to $175 billion.

GE shares rose 3.6 percent and helped boost U.S. stock futures in premarket trading, as investors called the results a sign of an improving global economy.

"It's the economy at large," said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group in Traverse City, Michigan.

"If you look at developing nation growth, GDP is expected to grow 7 to 9 percent and in developed nations it's more modest but still expected to be in the 2 to 3 percent range. That reflects a growing economy and GE is well positioned for that."

"The environment continues to improve," Chief Executive Jeffrey Immelt told analysts during a conference call. "We just think the economy can get a little bit stronger everyday."

The largest U.S. conglomerate said on Friday fourth-quarter net income came to $4.5 billion, or 42 cents per share, up from $3 billion, or 28 cents per share, a year earlier.

Profit from continuing operations came to 36 cents per share, above the 32 cents analysts had expected, according to Thomson Reuters I/B/E/S.

REVENUE REBOUND

Revenue rose 1 percent to $41.38 billion, above the $39.9 billion analysts had expected.

"The most exciting thing is the return to organic revenue growth," said Jack De Gan, chief investment officer, at Harbor Advisory Corp in Portsmouth, New Hampshire. "The last two or two and a half years, organic revenue growth has been negative, and this is the first quarter that it's flipped positive."

GE's industrial organic growth, which excludes the impact of acquisitions and foreign exchange, rose 6 percent in the fourth quarter.

Deutsche Bank analyst Nigel Coe called the results "arguably their best quarter since 2007."

GE is viewed as a bellwether of the global economy due to the breadth and geographic reach of its operations. It competes with some of the world's largest businesses, including Germany's Siemens AG, French industrial group Alstom SA and Swiss engineering firm ABB Ltd.

GE's Immelt also noted that the company's finance unit posted a sharp improvement in the quarter, growing profit more than 10 times to $1.06 billion.