Stocks Close A Big Week With a Whimper

Google Leads Tech Slide

U.S. stocks limped to the end of a volatile week yesterday as the financial sector continued a three-day rebound even while weakness emerged in technology stocks when Google and Microsoft reported disappointing earnings.

"I don't think we will see a week with as much packed into it again for a while," said Art Hogan, chief market analyst at Jefferies & Co.

The Dow Jones industrial average rose almost 50 points yesterday, driven higher in part by a Citigroup earnings report that beat analysts' expectations. The tech-heavy Nasdaq composite index, meanwhile, lost 1.3 percent as investors digested the earnings reports from Google and Microsoft late Thursday.

Both Google and Microsoft reported large jumps in revenue but profit that fell short of Wall Street's expectations. Yesterday, Google shares dropped $52.12, or 9.8 percent, to $481.32, its biggest one-day loss since it went public in 2004. Microsoft was off $1.66, or 6 percent, to $25.86, its worst one-day loss in two years.

But it was a week of renewed fortune for financial services firms. The industry began a rebound after federal regulators said they would crack down on some types of short sellers and bolster the mortgage giants Fannie Mae and Freddie Mac. Wells Fargo and J.P. Morgan Chase helped turn around investor pessimism with better-than-expected earnings that helped offset concerns about Merrill Lynch's continued losses, which reached $4.65 billion in the second quarter.

After closing below 11,000 for the first time in two years Tuesday, the Dow climbed another 49.91 points, or 0.44 percent, yesterday to close at 11,496.57. It is up more than 400 points for the week. The broader Standard & Poor's 500-stock index stayed nearly flat yesterday, up 0.36 points, or 0.03 percent, to close at 1260.68.

After losing 45 percent of their value last week, shares of Fannie Mae and Freddie Mac were up 22.6 percent and 10.2 percent, respectively, yesterday.

The market has also been boosted by a decline in crude oil prices amid concerns about weakening fuel demand. The price dipped to $128.88 yesterday, down more than $16 for the week on the New York Mercantile Exchange.

The technology sector has been relatively insulated from the most extreme swings of the stock market, but yesterday's dive by several major tech firms suggests that the economic troubles that have afflicted the banking and housing industries are beginning to spread to advertisers and Internet consumers.

The technology-oriented Nasdaq fell 29.52 points yesterday, or 1.28 percent, to close at 2282.78. It has gained 70 points since falling Monday.

The disappointing earnings from Google and Microsoft suggest that the general economic weakness could slow the technology industry's growth, said Laura Martin, senior media analyst with Soleil Securities. "If the economy weakens further and the weakness lasts longer, no company on the Standard & Poor's index will be unaffected," she said.

Other tech staples also took a hit. Apple was down $6.66, or nearly 4 percent, to close at $165.15. Advanced Micro Devices fell 65 cents, or 12 percent, to close at $4.65, and Amazon.com fell $2.99, or 4 percent, closing at $69.12.