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Techs Tumble As Markets Can't Hold Early Gains

Good news on inflation gave investors some early cheer, but it didn't last.
Investors sent technology stocks sharply lower Friday, giving all three major indexes another losing week. The good news of a better-than-expected reading in the Labor Department's consumer price index got the markets off to a good start, but investors' increased preoccupation with earnings took its toll as the day went on.

The Dow Jones industrial average fell 23.38, or 0.2%, to 10,139.78, more than giving up a 75-point gain from earlier in the session. The Standard & Poor's 500 index fell 5.30, or 0.5%, to 1,101.39, and the tech-heavy Nasdaq composite index fell 29.56, or 1.6%, to 1,883.15, its lowest close since May 17. For the week, the Dow fell 0.7%, the S&P fell 1%, and the Nasdaq fell 3.3%. It was the third straight down week for the Nasdaq, the fourth for the Dow, and the fifth for the S&P 500.

The InformationWeek 100 ended the week on a down note, falling 5.78, or 2%, to 284.00. For the week, the index lost 4.9%. The Nasdaq 100 tracking stock fell 40 cents to $34.67 as more than 120.3 million shares changed hands.

The consumer price index rose just 0.3% in June--half the previous month's rise--and core prices, excluding energy and food, were up just 0.1%. That's good news for companies, since the Federal Reserve was expected to be less likely to aggressively raise benchmark interest rates, currently at 1.25%, while prices remain relatively steady. But investors sent prices tumbling because of other concerns, such as Friday's spike in oil prices due to a terrorist attack on an Iraqi pipeline.

IBM and Dell both closed the week strongly. IBM, which reported its second-quarter financials after Thursday's bell, beat Wall Street expectations by 4 cents per share and issued a strong positive outlook for the rest of the year. Dell also issued with a bullish outlook prior to its Aug. 12 earnings report. IBM climbed 26 cents to $84.28, while Dell rose 55 cents to $35.42.