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NEW YORK - TECHNOLOGY stocks fell on Friday and drove the Nasdaq down 1 per cent on disappointing earnings from Google and Microsoft, while Citigroup's smaller-than-expected loss pushed up the Dow and helped keep the broader market near the unchanged mark.
Nevertheless, the S&P 500 and Nasdaq snapped a six-week losing streak. The Dow snapped four weeks of losses as financial stocks rallied after the United States government outlined a plan to shore up mortgage finance companies Fannie Mae and Freddie Mac and the SEC announced rules to curb short selling.
Reassuring quarterly results from key banks also fed the week's rally, with Citigroup capping a series of closely watched scorecards from Wells Fargo and JPMorgan Chase that beat analysts' estimates.
On top of that, the biggest weekly drop ever in oil prices also gave investors a renewed appetite for equities.
Despite their weekly gain, tech stocks ended the week with a thud. Google's stock fell almost 10 per cent, its biggest one-day percentage drop since it went public in 2004, and Microsoft shares slid 6 per cent, a day after the tech bellwethers' quarterly results fell short of expectations.
'The government's plan to provide funding for Fannie and Freddie and the SEC's short-selling rule put a floor, for now, under financials. But you'll start to see investors increasingly differentiate between 'the haves and have nots' in financials,' said Mr Michael Sheldon, chief market strategist at RDM Financial, in Westport, Connecticut.
The Dow Jones industrial average rose 49.91 points, or 0.44 per cent, to 11,496.57.
The Standard & Poor's 500 Index was little changed, up just 0.36 of a point, or 0.03 per cent, at 1,260.68.
The Nasdaq Composite Index, meanwhile, shed 29.52 points, or 1.28 per cent, to close at 2,282.78.
For the week, the Dow rose 3.5 per cent, its best week in three months.
The S&P 500 rose 1.7 per cent, while the Nasdaq was up 1.9 per cent.
Citi's results were a sharp contrast to a larger-than-expected quarterly loss from Merrill Lynch. For most of the session, Merrill's stock was lower, but it eked out a gain in the last hour of trading. Merrill ended up 0.6 per cent at US$30.91.
Regional banks, many of which report earnings next week, were among the top sector drags on the S&P 500, suggesting investor worry that the credit crisis has not run its course for some of the less diversified, smaller banks. The S&P Regional Banks Index fell 0.8 per cent. -- REUTERS
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