Last night's earnings announcements -- from the likes of technology giants Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report and Nortel Networks (NT) -- helped keep the Nasdaq Composite Index afloat -- for the third day in a row. The technology index -- which is now up more than 12% for the year -- ended in positive territory, the second three-day rally this month.

Despite recent better-than-expected earnings news earlier this week from tech components Microsoft and

IBM

(IBM) - Get International Business Machines (IBM) Report

, the

Dow Jones Industrial Average ended lower, dragged down by weakness in cyclical, retail and financial issues. The blue-chip index is down for the year.

While both indices witnessed their share of profit-taking today, the Dow had losses in 22 of its 30 members. Leading the losers were

3M

(MMM) - Get 3M Company Report

-- off 2.1% to $106.75 -- and

Home Depot

(HD) - Get Home Depot, Inc. (HD) Report

-- behind 7.3% to $41. Earlier today, the home improvement retailer lowered earnings estimates for its fourth-quarter, due to slowing consumer demand and declines in material prices. This is the second straight quarter in a row that Home Depot has warned.

The Dow's positive momentum this afternoon came from its tech components: IBM -- ahead 2.7% to $111.25,

Hewlett-Packard

(HWP)

-- up 3.1% to $35.75,

Intel

(INTC) - Get Intel Corporation (INTC) Report

-- higher 4.3% to $33.56, and Microsoft -- in front 9.9% to $61.

Thursday night, Microsoft -- the second most actively traded stock in recent action -- beat fourth-quarter revenue estimates and reported a 20% increase in unearned revenue from a year ago. Also Thursday evening, telecommunications equipment manufacturer Nortel met fourth quarter forecasts, but cautioned about the impact of the slowdown in telecom spending on its future results. At last look, shares of Nortel ended up 9% to $40.

Over the past few weeks, market experts have become doomsayers when it comes to fourth-quarter earnings. But the recent spate of good (or, not awful) news this season may signal that the worst is over. In other earnings headlines,

eBay

(EBAY) - Get eBay Inc. Report

beat fourth-quarter earnings and revenue estimates Thursday night -- making the company an exception in the Internet arena. Shares of eBay gained 6.9% to $50.13.

Other tech companies fared less well in recent trading, on the heels of their earnings results. Shares of

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

dropped 11.5% to $30.88, after the Unix-giant said last night that it met earnings targets, but missed revenue forecasts. Similarly, shares of

Critical Path

(CPTH)

remained in critical condition, after the company posted a far greater loss than expected, having said that it expected to be profitable by the fourth quarter.

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Sector Watch

The

Philadelphia Stock Exchange Computer Box Maker Index

was down 2.1% -- getting some IBM's earnings report on Wednesday night. Shares of

Dell

(DELL) - Get Dell Technologies Inc Class C Report

-- which was upgraded this morning by

Credit Suisse First Boston

-- hopped 5.9% to $25.63, while shares of

TheStreet Recommends

Compaq

(CPQ)

jumped 6.8% to $20.50.

Delta Air Lines

(DAL) - Get Delta Air Lines, Inc. Report

helped take down the

American Stock Exchange Airline Index

-- off 3%, and the

Dow Jones Transportation Average

-- lower 3%. Thursday, the airline announced that its earnings declined 5.2%. At the beginning of January, Delta had warned that a labor dispute with its pilots would cut revenue.

The

S&P Retail Index

was falling 33.6 to 825.7 after Home Depot's news.

Best Buy

(BBY) - Get Best Buy Co., Inc. Report

,

The Gap

(GPS) - Get Gap, Inc. (GPS) Report

and

May Department Stores

(MAY)

were some other retailers taking a beating today.

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Bonds/Economy

Treasuries have been trading lower today as investors take profits after bonds' three-day rally. The strong opening in equities, paced by better-than-expected earnings from prime tech movers, has also lessened the draw of fixed-income instruments. But stocks are mostly in retreat now, giving Treasuries some breathing space. The long bond, which had led the money market rally over the past week, is still deep in the red. Yields are up marginally across the board.

Notes and bonds had rebounded in recent days on renewed hopes that the

Federal Reserve will lower interest rates by half a percentage point.

The benchmark 10-year

Treasury note lately was down 16/32 to 104 7/32, raising its yield to 5.182%.

In economic news, the

international trade

(

definition |

chart |

source

) report showed that the deficit narrowed to $32.99 billion in November from a revised reading of $33.55 in the prior month. This is the first time since mid-1997 that the deficit has declined two months in a row. Imports as well as exports fell. The trade data, however, lags behind the latest news about the economy. Currently available numbers support the view that the economy is slowing.

The

Consumer Sentiment Index

(

definition |

chart ) fell to 93.6 in January from 98.4 in December, its lowest level since October 1998. The gauge measures the confidence consumers have in the economy six to nine months in the future.

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