NEW YORK — With the quarterly reporting season in full swing, the information-technology sector has beaten others in topping analysts’ sales forecasts, though even well-regarded results from Microsoft and Amazon couldn’t lift the broader market Friday.
“We’ve already discounted great earnings,” said Mark Pado, U.S. market strategist at Cantor Fitzgerald.
As the reporting season progresses, investors start to fear “what follows is not going to be better than what we’ve been getting,” he said.
On Friday, Microsoft gained 5.38 percent to $28.02, one of just two stocks still in the green among the Dow Jones industrial average’s 30 components.
The gain came after the software titan reported an 18 percent drop in third-quarter profit, yet easily beat Wall Street expectations, sending shares to a high not seen since the summer of 2008.
Thirty-one of 36 tech companies, or 86 percent, have topped sales estimates, said Standard & Poor’s index services unit. That tally came ahead of Microsoft’s earnings.
“The tech sector is important,” both for sales and mergers, said S&P senior index analyst Howard Silverblatt. “They are the biggest sector to begin with, and they have lots of cash” to spend on acquisitions.
Also giving a lift to the tech sector Friday, shares surged to a new all-time high after the online retailer reported a 69 percent jump in third-quarter earnings and a better- than-expected forecast for the current quarter.
Netflix Inc. shares also jumped to a fresh all-time high.
Investors have been closely attuned to whether companies are beating profit estimates and, even more importantly, showing sales growth as they report third-quarter earnings. Strong results from Intel Corp., JPMorgan Chase & Co. and others have helped drive the broader market to new highs for the year.
But in recent days, analysts have said they expect stocks could give up some of those gains, even temporarily, as investors take some profits.
The S&P 500 Index declined 13.31 points, or 1.2 percent, to 1,079.6, with the broad market indicator off about 1 percent for the week.
The Dow industrials fell 109.13 points, or 1.1 percent, to 9,972.18, a level that positions the blue chips for a slight weekly loss of 0.2 percent.
The technology-laden Nasdaq Composite dipped 10.82 points, or 0.5 percent, to 2,154.47, readying it for a 0.1 percent weekly loss.
In the week ahead, 149 S&P 500 companies and four Dow industrial firms are expected to report quarterly earnings.
The market is looking to tech for signs of life in both corporate expenditures, such as replacing PCs, and sales to consumers, from buying electronics to entertainment, Silverblatt said.
“Sales are better, and that’s important to the recovery, but still nowhere near what it was. If you’re a long-term investor, we’ve just turned the corner,” he said.
