Technology in focus, with one eye on Greece

Big tech names will dominate market movements on Friday, with continuation of Greece debt talks and just one economic data point expected.

"Overall, companies have not been as disappointing as the initial expectations and that's giving the market a boost," said Quincy Krosby, market strategist at Prudential Financial. "That said, we are keeping a close eye on revenue because that is a key barometer."

As Wall Street approaches the midpoint of the earnings season, investors have cheered the fact that the bulk of reports have met estimates. In fact, 134 companies out of 187 reports so far have beat expectations, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Traders work on the floor of the New York Stock Exchange.
Richard Drew | AP
Traders work on the floor of the New York Stock Exchange.

On Thursday, stocks closed at highs on earnings cheer, with the Nasdaq closing at 5,056.06 to set a record close for the first time in 15 years. The S&P 500 hit an intraday record but closed lower at 2,112,93, failing to hold above its all-time high of 2,117.39 set in March. The Dow Jones industrial average came within 1 percent of its record close but ended lower, up 20 points at 18,058.69.

Corporate news and quarterly reports from IBM, Apple and AT&T helped push the indices higher. Apple reports results on Monday after the bell but is in focus Friday as the Apple Watch is released.

Robert Pavlik, chief market strategist at Boston Private Wealth, is watching major tech stocks such as Google, and Amazon.com on Friday for reaction to their earnings reports after the bell on Thursday.

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Google's report missed analyst expectations on both the top and bottom lines, as well as in advertising figures. Amazon.com earnings declined as expected but reported light guidance. Revenue did beat expectations with a boost from the e-commerce firm's primary market, North America.

One bright spot could be Starbucks, which critically topped expectations for global same-store sales. The coffee retailer also beat on both the top and bottom lines.

Microsoft posted earnings and revenue that beat estimates, as the firm shook off the negative impact of the strong U.S. dollar with growth in hardware sales and commercial cloud computing.

Key firms reporting before the bell on Friday include Biogen and American Airlines.

Earnings aside, analysts still like the tech sector. "It's hard to believe the market will trend to higher levels without participation from technology," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

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Among the 10 sectors, information technology has the second-highest increase in sales from the same quarter last year, according to reported and estimated revenue figures from S&P's Silverblatt.

The majority of companies have beat on earnings but missed on sales.

"If the revenue misses continue (into the second quarter), the market is going to have to adjust to that and reprice," Krosby said. "It provides almost an early warning on economic activity."

Durable goods for March come out at 8:30 a.m., with expectations of a 0.6 percent increase, according to analysts polled by Reuters. Durable goods, excluding aircraft and defense, are expected to rise by 0.3 percent. The figure declined more than 1 percent in February.

Some analysts expect a boost to durable goods from March's robust auto sales, which rebounded from a February dip with a 0.7 year-over-year increase.

Investors will also keep an eye on Greece as euro zone finance ministers meet in Riga, Latvia, on Friday to review the debt talks between Athens and its international lenders.

"What happens with Greece tomorrow, Yemen, the deal with Iran, will continue to play a factor in the U.S. market," said Ryan Larson, head of U.S. equity trading for RBC Global Asset Management (U.S.).

On Thursday, Greek Prime Minister Alexis Tsipras called for faster work towards a reform-for-cash deal with euro zone creditors to keep his country afloat. Earlier in the day, Tsipras met with German Chancellor Angela Merkel. Both sides called the discussions constructive.

Read MoreGreek crisis talks as Tsipras, Merkel meet

"Expectations are that Greece will stay in the Euro and they'll work out a deal, whether (or not) that deal kicks it down the road," said Paul Nolte, portfolio manager at Kingsview Asset Management. "The only reaction will be on the negative side. The market expectation is that there will be a resolution."

That resolution, however, might not come for weeks as Greece pushes against a May 12 deadline for loan repayments.

IHS Senior Economist Diego Iscaro and Senior Country Analyst Blanka Kolenikova said in a note Thursday that "the chance of Greece reaching a deal at tomorrow's Eurogroup meeting is very slim. Realistically, this means that Greece is unlikely to receive official funds until at least the next Eurogroup meeting scheduled for 11 May."

Also subject to geopolitics, oil will remain under scrutiny as the commodity traded above $58 a barrel for the first time in 2015 and settled at a new high for the year.

Tensions in the Middle East, particularly between Saudi Arabia and Yemen, have stirred concerns of pressure on supply. Friday's weekly rig count figures could shed light on whether or not domestic supply is also falling.

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"Geopolitical fears are a fundamental and a real cost of doing business," said Phil Flynn, senior market analyst at The PRICE Futures Group. "But I also think more people are starting to grasp the long-term bullish ramifications of billions of dollars in capex cuts."

Reuters contributed to this report.