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Stocks held back by tech sector

Stocks fell Friday led by a slump in technology stocks. Microsoft fell the most in more than four years after the company wrote off nearly $1 billion on its new tablet computer and reported declining revenue for its Windows operating system. 

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Specialist trader Joe Mastrolia works on the floor at the New York Stock Exchange, Friday. Technology stocks in the S&P 500 have lagged the S&P 500 this year, gaining only 8.5 percent, versus 18.6 percent for the broader index.

Brendan McDermid/Reuters

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A bad day for technology stocks Friday held back the stock market's big run-up.

Microsoft led the slump in tech, falling the most in more than four years after the company wrote off nearly $1 billion on its new tablet computer and reported declining revenue for its Windows operating system. Google dropped after its revenue fell below analysts' forecasts, partly because the Internet search leader's ad prices took an unexpected turn lower.

With tech stocks falling, the Standard & Poor's 500 index was held to a gain of 2.72 points, or 0.2 percent. That pushed the index up to another all-time of 1,692.09. The S&P 500 has rebounded from a poor performance last month and is up 5.3 percent in July.

Despite the market's broad advance this month, a growing list of poor tech results is raising concerns about the strength of the economy and the stock market. Intel and eBay also reported weak results this week, and chipmaker Advanced Micro reported a second-quarter loss because of a worldwide slump in PC demand.

Technology "has definitely been a sector that people have been expecting big things from and it has not delivered," said Randy Frederick, Managing Director of Active Trading & Derivatives at the Schwab Center for Financial Research.

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