Tech stocks were continuing yesterday's much-needed rally.

The tech-heavy

Nasdaq Composite Index was lately on its highs, advancing for the second straight day.

Even so, a mix of positive and negative earnings reports has kept investors on their toes. Today's rally is muted compared with yesterday's frenzy.

Microsoft

(MSFT) - Get Report

, up 5.7%, was still benefiting from its stellar post-close earnings report Wednesday. And one of Microsoft's partners,

Commerce One

(CMRC)

was also basking in the warm glow of investor optimism. It was lately 5.5% higher. After Thursday's close, Commerce One posted a loss that was

naroower than expected.

Unfortunately, the Nasdaq's most active was mobile-phone giant

Ericsson

(ERICY)

, down 10.7% after it cut its

sales and profitability forecasts , citing mobile-phone losses. The stock was downgraded by

Lehman Brothers

this morning.

Ericsson's announcement had early on put a damper on telecoms, but

Nokia

(NOK) - Get Report

and

Broadcom

were lately higher, getting some extended lift from separate positive earnings announcements. Also, Nokia said handset demand remains strong, countering fears of a slowdown in that business.

TheStreet.com

earlier wrote separate stories on

Broadcom and

Nokia.

The Comp was getting some negative drag from heavyweights

Oracle

(ORCL) - Get Report

,

Dell

(DELL) - Get Report

and

Qualcomm

(QCOM) - Get Report

.

Internet stocks were getting a boost on the heels of blowout earnings from

eBay

(EBAY) - Get Report

last night.

Goldman Sachs

raised its EPS estimates for this year and the next on eBay, and

TST Recommends

ABN-Amro

raised its EPS estimates for this year and next on SDL.

TheStreet.com

wrote a separate story on

eBay's earnings.

The

Dow Jones Industrial Average lately was edging back toward break-even, after a banner day yesterday.

News that

United Technologies

is in talks to buy fellow Dow component

Honeywell

(HON) - Get Report

sent United Tech's stock down 11.9%.

Coca-Cola

(KO) - Get Report

was subtracting about 16 points from the blue-chip index. It was getting the cold shoulder from investors after the company announced this morning that a weak euro could put pressure on its earnings going forward. The soft-drink top dog narrowly beat earnings forecasts this morning. Coca-Cola was off 4.7%.

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Sector Watch

After leading yesterday's rally, semiconductors were taking a little breather today. The

Philadelphia Stock Exchange Semiconductor Index

lately was barely in the green, up 0.1%.

Financials were mixed with the

American Stock Exchange Broker/Dealer Index

up a solid 5.2%. The

Philadelphia Stock Exchange/KBW Bank Index

was 0.5% lower, though, while the

S&P Insurance Index

was basically unchanged.

And oil sectors were back in the game with the

American Stock Exchange Natural Gas Index

up 2.3%, and the

Philadelphia Stock Exchange Oil Service Index

up 2.5%.

The

Philadelphia Stock Exchange Forest & Paper Products Index

, down 2.1%, and

S&P Retail Index

, off 1.8%, were suffering yesterday, after rallying earlier this week when nothing else was.

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Bonds/Economy

The bond market continues to improve, overall, though lately the benchmark 10-year

Treasury note was 1/32 lower at 100 21/32, yielding 5.661%.

The 30-year

Treasury bond was at 107 6/32, 4/32 higher, to yield 5.741%.

With no economic releases due today, there will probably be little new to cause any change in the market's view. Mixed performance in equities and ongoing Mideast tensions are likely to dominate the market's interest.

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