By Kate Gibson

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

On Monday, semiconductor manufacturer Novellus Systems Inc. (NVLS) is scheduled to report its results, while chip giant Intel Corp. (INTC) is slated to report second-quarter results on Tuesday. Intel, the world's No. 1 maker of computer microprocessors, is expected to report a sharp drop in sales and earnings.

But 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.

On Friday, hardware companies including Dell Inc. (DELL) drew an upgrade from Goldman Sachs analyst David Bailey, who expects hardware stocks "to continue to move higher through the second half of the year and into 2010 as fundamentals from stabilization to growth, and multiples begin to normalize." .

But Harry Rader, chief executive and portfolio manager for Rady Asset Management, has a far more bearish take on the economy and technology, which has outperformed other sectors, leaving the tech-heavy Nasdaq up 11% since 2009 began.

Conversely, the Dow industrials are off more than 7% for the year so far, while the S&P 500 is down nearly 3% for the same period.

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 Rader.

Rader believes the stock market is ripe for a rotation "out of technology and into something else," and 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%," he said.

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

At 2:30 p.m., the Dow Jones Industrial Average (DJI) stood at 8,113.6, off 69.53 points, or 0.9%, positioning it for a weekly fall of 2%. The S&P 500 Index (SPX) shed 6.19 points, or 0.7%, to 876.49, readying it for a slide of 2.2%, and the Nasdaq (RIXF) declined 1.96 points, or 0.1%, at 1,750.5, off 2.6% for not-yet-ended week.