MARKET SNAPSHOT: U.S. Stock Market Hopes To Draw Lift From Tech

By Kate Gibson

As U.S. stocks on Friday steered toward a fourth consecutive week of declines, the Nasdaq Composite Index remained positive for the year, ahead of next week's earnings reports from some of the technology sector's major players.

On Friday, telecommunications, financials and energy shares paced Wall Street's declines, with information-technology issues fronting the limited gains.

In early afternoon trades, the Dow Jones Industrial Average (DJI) stood at 8,121.5, off 61.59 points. The S&P 500 Index (SPX) shed 5.97 points to 876.71, and the Nasdaq (RIXF) declined 3.49 points at 1,749.1.

Chip giant Intel Corp. (INTC) is slated to report second-quarter results on Tuesday, with the world's No. 1 maker of computer microprocessors expected to report a sharp drop in sales and earnings.

Investors are more likely to be tuned into what the company's executives say about the business outlook.

"The market will be looking at Intel's sales and margin guidance. The linkage between production and inventory has stabilized the chip sector, but the market will want to see signs of accelerating end demand to keep stock prices trending higher from the spring low," said Nick Kalivas, equity analyst at MF Global Research.

The only difference between tech and other market sectors is that "technology has been in favor; a number of the stocks have gotten way ahead of themselves," said Harry Rader, chief executive and portfolio manager for Rady Asset Management.

Rader, who believes the stock market is ripe for a rotation "out of technology and into something else," lists BMC Software Inc. (BMC) and Computer Sciences Corp. (CSC) as among the tech stocks now being shorted by his firm.

Citrix Systems Inc. (CTXS), Hewlett-Packard Co. (HPQ), Motorola Inc. (MOT), McAfee Inc.(MFE), Palm Inc. (PALM) and Teradata Corp.(TDC) also will be on Rader's list of short candidates "if they moved up another 3% to 5%," Rader said.