What a Week: Tech Hangs Tough

Oil prices got all the headlines this week as crude futures hit a record on Wednesday, stalled and then shot to a new high Friday of $43.82 a barrel. Beneath the surface, the price action in technology suggested the market's speculative side might be feeling for a bottom.

Predictably, oil giants including ExxonMobil(XOM Quote), ChevronTexaco(CVX Quote) and ConocoPhillips(COP Quote) reported monster second quarters, helping the S&P 500 gain 1.4% for the week and snap a six-week losing streak.

Threats of a shutdown by Russia's largest oil producer, OAS Yukos, pumped up crude futures Wednesday. When that rumor fell flat Thursday, the markets ramped up again Friday on concerns that worldwide supplies can't keep up with growing demand. Away from the headlines, general fears of unrest and insecurity in Iraq and Saudi Arabia along with labor issues in Nigeria and Norway and an election in Venezuela have put steady upward pressure on oil.

Higher oil prices -- which have gained 40% over the past year -- helped fill second-quarter coffers at the big three U.S. producers. Chevron shares gained 1.9% in a week that ended with the company reporting a doubling of net income. Conoco gained 1.2% on a 73% earnings increase. And ExxonMobil climbed 1.6%, with earnings up 39%. The stocks have gained an average of 37% over the past year.

Less predictably, however, technology and telecommunications shares started to find their way out of the doldrums, with the Nasdaq Composite gaining 2.1% over the five sessions. The bottom could be retested next week if oil prices continue climbing and the market gets jittery over the July payroll report, which hits Friday.

The threat that rising oil prices would put a damper on growth had previously kept the Nasdaq down whenever crude rallied. But the tech sector got a boost from Tuesday's report that the Conference Board's consumer confidence index rose to its highest level in two years in July, contrary to a predicted drop. It was the first piece of hard data signaling that weakening consumer demand in June wasn't the start of something ugly.