Updated from 3:14 p.m. EDT

One of the only flickers of green on stock screens Friday, the

Philadelphia Semiconductor Index

, turned down in the final hour of trading to join the rest of the market on a very red day.

Despite the late-day surrender, the SOX outperformed nontech indices this week. What happened over that period, market experts said, was a little bit of rotation into distressed technology stocks.

"There has been some bargain-hunting in technology stocks, as money rotates out of consumer and financial groups," said Tony Cecin, manager of Nasdaq trading at U.S. Bancorp Piper Jaffray.

For the week, the

Dow Jones Industrial Average

ended down 7.7%, while the

Nasdaq Composite

lost almost 4%. The SOX finished behind by 3.5%.

Better-than-expected results at



lifted the stock 4.5% to $19.86, while

PMC Sierra


ended up 6.7% at $10.46. Both finished off their highs of the session, however.

German chipmaker



ended the session flat after saying it expected a moderate improvement in demand this year.

At the beginning of the week, consumer weakness led investors out of some stocks that had done well this year. "As people got concerned that the consumer was losing steam, we saw some rotation out of retail, basic material, and housing sectors," said Tim Heekin, director of trading at Thomas Weisel Partners. "This type of rotation could continue as long as the view of a weakening consumer holds."

For most of July, the Nasdaq has traded below its September low, while the Dow only broke through that level Friday. The SOX, which tested its low last week, has so far been holding above it.

"It is reasonable to make the assumption that the Nasdaq is now close to a low," said Richard Dickson, a technical analyst at Hilliard Lyons. "The action in semiconductors supports that idea."

Semiconductor stocks are typically regarded as a leading indicator for the technology sector. On Friday,

Samsung Electronics

said it expects DRAM prices to rise in the second half of the year.

Nevertheless, 2002 outlooks still remain weak, and many technology stocks aren't cheap. "Valuations may mean the Nasdaq can't rally," Dickson added. "But it could bounce along the bottom."