Techs sink as Google, Microsoft miss the mark, Dow up

[suguhopes]

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
top US government officials 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.

Citigroup capped a series of closely watched scorecards from Wells
Fargo and JPMorgan Chase & Co 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 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 percent, at 1,260.68. The Nasdaq Composite Index,
meanwhile, shed 29.52 points, or 1.28 percent, to close at 2,282.78.
For the week, the Dow rose 3.57 percent, its best week in three
months. The S&P 500 rose 1.71 percent, while the Nasdaq finished the
week up 1.95 percent.

CITIGROUP SHINES, REGIONAL BANKS WILT

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 percent at $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. Citigroup jumped 7.7
per cent to $19.35 after the Dow component reported a smaller-than-
expected $2.5 billion loss and said it would keep cutting costs and
getting rid of risky or poorly performing assets.


N.Sukumar
Research Analyst