TechWeek: Not-So-Great Expectations

Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) solid second-quarter earnings provided an invigorating pick-me-up as earnings season reached its midpoint.

And good news from eBay(EBAY Quote - Cramer on EBAY - Stock Picks) and Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) earlier this week also didn't hurt at all.

But Mr. Softee's better-than-expected numbers weren't nearly enough to cure the blahs that continue to haunt tech stocks. The Nasdaq posted another losing week (down 0.7% since Friday), sparked in part by Advanced Micro Devices(AMD Quote - Cramer on AMD - Stock Picks), which, mired down in the big muddy waters of a price war with Intel(INTC Quote - Cramer on INTC - Stock Picks), posted a truly ugly quarter.

One big reason for the long faces (and short positions) is this: Among S&P 500 companies, tech earnings grew by a paltry 2% in the December quarter, while overall earnings by index companies grew by just under 10%, according to Thomson Financial. A final accounting of the quarter's strength is still a week or so away; just 39% of the S&P 500 has phoned home, and a bit more than half of the tech companies have reported.

But what we've seen so far is making a lot of investors -- already fretting over inflation -- nervous.

Thomson also reports that of the 39 tech companies that have posted earnings, about two-thirds have exceeded expectations and only a few more than 10% have missed. On the surface, that looks like a bullish performance. But consider this: The growth in S&P 500 tech earnings was just a fraction of what it was at this time last year, when profits were up a solid 18% year over year.

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