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Updated from 10:00 a.m. EDT

Stocks in the U.S. were struggling to find their footing Friday after consumer-sentiment numbers tapped a 26-year low and investors digested another mixed bag of earnings reports.


Dow Jones Industrial Average

rose out of the gate, but was recently shedding 3 points to 12,846. The

S&P 500

ticked up 2 points to 1390. The

Nasdaq Composite

, dragged lower by


(MSFT) - Get Microsoft Corporation Report

disappointing near-term guidance, was sliding 17 points to 2412.

Blue chips lost steam after the University of Michigan put U.S. consumer confidence at 62.6 in April, a dismal level not seen since the early 1980s. That's roughly a half-point lower than the preliminary reading, and comes in 7 points lower than March. The survey found that 9 out of 10 American consumers believe the U.S. is already in recession.

After that, the dollar began backpedaling from stronger early gains against the euro, recently firming by just 0.4% at $1.5624. Against the yen, the greenback was up marginally at 104.36.

As for corporate news, Microsoft shares sagged 5.6% after the software giant offered soft guidance for the fiscal fourth quarter, even as it projected more robust numbers for fiscal 2009 and bested last quarter's analyst targets.

Similarly, disk-drive maker

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Western Digital

(WDC) - Get Western Digital Corporation Report

beat top- and bottom-line analyst views for the fiscal third quarter, and issued fourth-quarter profit guidance of 77 cents to 83 cents a share. Wall Street is looking for 80 cents. The company said a bigger-than-expected decline in demand for its products should weigh on current-quarter sales. Shares were tumbling 7.7%.

On a brighter note,

American Express

(AXP) - Get American Express Company Report

gave support to the Dow after its first-quarter profit drop wasn't as steep as analysts were expecting, thanks to its international presence. The credit-card company also reaffirmed its above-consensus view for the full year. Shares climbed 3.1%.


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was also having a good day, lately climbing 5.8%, after the tire maker reported swinging to a profit on a "record" top line of $4.9 billion. The company also trounced Street profit views on an adjusted basis.

In the last session, the major averages closed on an upswing, in spite of some poor earnings, thanks to a surging greenback and cooling crude oil prices. At the end of the day, the Dow rose 86 points to 12,849, and the S&P 500 added 9 points to 1389. The Nasdaq climbed 24 points to 2429.

Among the new day's research calls,


(WMT) - Get Walmart Inc. Report

was upgraded to buy from neutral at Merrill Lynch, while


(F) - Get Ford Motor Company Report

was downgraded at JPMorgan, Bear Stearns and Merrill a day after the automaker's earnings-inspired rally.

Oppenheimer initiated three ethanol stocks,

Pacific Ethanol

(PEIX) - Get Alto Ingredients, Inc. Report



( VSE) and

Aventine Renewable Energy

( AVR), with perform ratings, and Citigroup upgraded China-based Internet stocks

(BIDU) - Get Baidu Inc. Report


(SOHU) - Get Limited Report

to buy from hold.

Commodities prices were stemming some of the previous session's losses. Crude oil added $1.61 to $117.67 a barrel, and gold futures advanced $5.30 to $892.10.

Treasury prices were taking a hit. The 10-year note lost 12/32 in price to yield 3.87%, and the 30-year bond lost 23/32 in price, yielding 4.59%.

Overseas markets were mixed. In Asia, Tokyo's Nikkei 225 jumped 2.4% overnight,and the Hang Seng Index in Hong Kong declined 0.6%. As for European bourses, the FTSE 100 in London was down by a fraction. Germany's Xetra Dax and the Paris Cac climbed about 1.2% each.

As originally published, this story contained an error. Please see Corrections and Clarifications