Stocks pared losses Friday, and the tech-heavy Nasdaq turned slightly higher, amid continuing worries about the economic recovery and bearish action in expiring August options.
The Dow Jones Industrial Averagewas down more than 40 points, after a loss of more than 120 earlier, but nonetheless was on track to end lower for the week.
led by Hewlett-Packard , AT&T , and General Electric.
Financial stocks Travelers and JP Morgan led the Dow gainers.
The S&P 500 was down, on track to close lower for the third week in the past four, but the Nasdaq rose slightly, after trading lower most of the day, led by tech companies including Intuit , Marvelltechnology and Symantec . The Nasdaq is on track to turn positive for the week.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 26.
Most of the key S&P 500 sectors fell, led by energy, industrials, and telecom, but utilities and technology turned higher.
MarvellTechnology shares jumped almost 10 percent after the chipmaker gave a strong revenue growth forecast despite a tough hard-drive market, as it came out of an inventory overhang.
Intuit shares soared after reporting a quarterly loss narrower than expected, and was on pace to record a multi-year high. Symantec was benefiting from Thursday's news that Intel plans to acquire Symnatec rival McAfee.
Despite the boost in tech stocks, the market was still mostly down, and volume was light.
One concern is the spike in mergers and acquisitions activity to the highest levels seen since late 2009 —typically a bullish sign for the market — has failed to turn around sentiment, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
"If companies are willing to put cash to work and buy other companies, that’s usually a bullish sign," Detrick said. "But this economic data is trumping everything."
In addition, August monthly expiration occurs today, an event that now has taken a more bearish outlook, said Larry McMillan, president of McMillan Analysis in a note to clients.
"As a result, there is a negative bias to the expiration now, since there is some open interest in the in-the-money puts," he said. "This is likely why the market is lower today, even though there is no economic news."
McMillan added that a breakdown below 1,060 on the S&P 500 on a closing basis "would be a signal to turn fully bearish."
Despite decent earnings reports, Hewlett-Packard dropped after the tech giant said its profit fell in line with estimates. Investors remain concerned after CEO Mark Hurd's departure. At least three brokerages cut their price targets on HP, although they continue to have positive ratings on the stock.
Dell shares were also weak after the PC maker beat profit and revenue estimates, but said its gross profit margin lagged expectations. At least four brokerages cut their price tragets on the firm.
Meanwhile, shares jumped for Salesforce.com to a multi-year high. Salesforce's second quarter numbers beat consensus estimates, and the company raised its outlook for future sales based on strength in cloud-based computing.
In other technology news, shares of Research In Motion tumbled after Morgan Stanley lowered its rating on the stock to "underweight" from "overweight," and cut its price target to $47 from $95, citing mounting security concerns from overseas governments with BlackBerry services in addition to demand for rival products, including the iPhone and Android phones.