Twin disappointments fromAmazon.comand Microsoftcould put a dent in tech Friday.
Microsoft shares fell, even as profits rose 35 percent to $4.01 billion or $0.45 per share for its fiscal third quarter, well above the $0.42 per share estimate. Yet, it failed to hit the loftiest forecasts. (Click for after-hours quote.)
Amazon.com also came up short when it predicted disappointing operating income for the second quarter despite a 68 percent jump in first-quarter profits that beat expectations.
"What that says to you is the market is fully priced," said John O'Donoghue of Cowen.
However, he also said he doesn't believe the market has yet reached a top.
"I'm a big believer that tops and bottoms get put in when everybody's all in, and I don't think the investor class is all in," he said.
Markets will continue to focus on Greece. The euro fell to its lowest in nearly a year in Asian trade on Friday, hammered by a wave of stop-loss selling as speculation Greece could default on its sovereign debt obligations spooked investors.
Moody's downgraded Greece's sovereign debt rating shortly on Thursday after the EU said Greece's deficit was worse than expected, sending the Greek 2-year bond yields soaring to 12.26 percent.
"Greece is festering..I think there's so much bad news out there that's been discounted that I don't know what the next catalyst will be to move the market one way or the other," O'Donoghue said. "Earnings are coming out and earnings are very good."
The euro fell to as low as $1.3202, from $1.3296 late in New York on Thursday when it lost 1 percent. Friday's trough was its lowest since April 30, 2009.
Economic reports expected Friday include durable goods at 8:30 a.m. and new home sales at 10 a.m.
Earnings expected Friday include Travelers, Honeywell,Rockwell Collins, Schlumberger, T.Rowe Price, Xerox and CMS Energy.
Treasury prices fell Thursday, and yields rose on better than expected existing home sales.
William O'Donnell, head of rates strategy at RBS, said the market was also focused on next week's Treasury issuance. There will be $99 billion in notes auctioned next week.
O'Donnell said the next big development around Treasury auctions should be the May 5 refunding announcement.
He said it is likely Treasury will cut back on issuance, and the 3-year, 10-year and 30-year supply will be reduced by about $1 billion each.
"The government is funding itself for Armageddon. They are funding at a rate of a $1.7 trillion deficit," he said. "These levels were set during the fall when it looked like we were going down forever and the budget deficits going up forever."
But now, "Some receipts are rising, but other receipts aren't getting worse at the pace they expected," he said.
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