<B>Friday's Market</B>: Stocks Finish Hectic Week With Modest Gains

A positive analyst call on chip-equipment makers kept tech shares higher for much of the day.
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Updated from 4:05 p.m. EDT

Stocks finished a volatile week with modest gains Friday after traversing the flatline several times during the session.

The

Dow Jones Industrial Average closed up 78 points, or 1%, to 8264. The

Nasdaq was gained 22 points, or 1.8%, at 1262, and the

S&P 500 added 14 points, or 1.7%, to nearly 853.

For much of the day, a somewhat upbeat note from Goldman Sachs was helping technology issues stay afloat. The firm raised its investment rating on companies that make equipment for the semiconductor industry, primarily on a valuation basis following recent selloffs.

"While fundamentals are not likely to improve in the near-term, we believe that fund flows and seasonality may drive a meaningful move in the stocks," wrote analyst James Covello in a research note.

Among the notable names were

Applied Materials

(AMAT) - Get Report

,

Novellus

(NVLS)

and

KLA-Tencor

(KLAC) - Get Report

. Applied Materials and Novellus were trading higher, while KLA-Tencor ticked lower.

The lone economic indicator released Friday was the University of Michigan's

consumer sentiment index for July, which came in at 88.1. Wall Street was expecting a reading of 86.5.

One of the big corporate stories influencing trading centered around troubled conglomerate

Tyco International

(TYC)

. The company named Edward Breen, formerly

Motorola's

(MOT)

president, as its new chief executive Thursday night.

The appointment ends a month-long search begun when Dennis Kozlowski left the company amid allegations of tax evasion. Since then Tyco has been trying to control accounting and debt concerns that sent its shares to a six-year low at one point Thursday.

Meanwhile, Motorola named Mike Zafirovski as its new president and chief operating officer. Tyco's shares climbed 45.8% to $12.03, while Motorola slid 10.5% to $10.90.

Dow component

General Electric

(GE) - Get Report

announced plans to separate its GE Capital financial services unit into four separate entities, including insurance, commercial finance, consumer finance and equipment. The company said it wanted to create more transparency in its financial statements. GE's shares traded up 4.3% to $27.80.

Citigroup

(C) - Get Report

and

J.P. Morgan

(JPM) - Get Report

have been asked by a Senate panel to provide sworn affidavits about the nature of offshore entities used in their dealings with

Enron

.

The companies' shares fell Thursday on reports of a

Securities and Exchange Commission

probe into those dealings, although by the end of the day they had recovered much of their lost ground. J.P. Morgan also had its debt-rating outlook dropped to negative from stable by Moody's.

Shares of

Williams Cos.

(WMB) - Get Report

were halted before the company issued a statement saying it has reached an agreement on a long-term energy contract with the state of California. The company also said that a credit crunch has forced it to delay construction on its Longhorn gas pipeline by six weeks. When trading resumed, the stock rose 20.5% to $1.06.

Andrx

(ADRX)

, which manufactures generic drugs, reported a second-quarter loss because of a $60 million charge to settle litigation. The company posted a loss of $27.8 million, or 37 cents a share, compared with a profit of $15.7 million, or 34 cents a share, in the year-ago period. Shares plunged 17.6% to $17.90.

JDS Uniphase

(JDSU)

, a maker of fiber-optic networking equipment, offered telecom equipment investors more bad news, saying after the close Thursday that its fourth-quarter loss widened because of soft demand. The company also lowered its sales and cash flow forecast for the coming quarters and plans further job cuts and plant closings in order to reduce expenditures. JDS dropped 15.1% to $2.16

Wireless services company

Qualcomm

(QCOM) - Get Report

reported third-quarter earnings that came in ahead of analysts' expectations, citing strong demand for its advanced wireless technology that enables users to access the Internet, download music, and exchange photographs. The stock tacked on 0.9% to $25.99

Merrill Lynch downgraded

Xcel Energy

(XEL) - Get Report

to reduce/sell from neutral, citing increasing risk related to its financing and reintegration strategy for

NRG Energy

. The move sent shares tumbling 36.8% to $7.55. The company posted weak quarterly results after the close Thursday, citing a meager energy trading market.

Elsewhere, video game maker

Electronic Arts

(ERTS)

posted a first-quarter profit of 5 cents a share, easily beating analysts' expectations of a loss of 8 cents. The company also raised its outlook for fiscal 2003, saying it expects revenue to grow in the high 20% range.

U.S. Treasury issues were mixed. The 10-year note was down 1/32 at 103 25/32, yielding 4.38%, and the bond was losing 9/32 to 100 28/32 and yielding 5.31%. Shorter-term issues were stronger.