* Baidu shares jump a day after earnings
* American Express, Verizon weigh on Dow
* Dow down 0.1 pct, S&P up 0.2 pct; Nasdaq up 0.8 pct
* For up-to-the-minute market news see []
(Updates to close)
By Edward Krudy
NEW YORK, Oct 22 (Reuters) - U.S. stocks capped a third
straight week of gains on Friday as encouraging earnings helped
the market sustain upward momentum, led by Baidu Inc <BIDU.O>,
the latest tech company to beat estimates.
The market has defied expectations for a pullback following
a strong rally prior to the earnings season. Some investors
were expecting the results to provide an excuse for broad
profit-taking.
"To get decent earnings after a nice little rally in the
market and have the market sustain the gains or even achieve a
little more is a really good thing and bodes well," said Robert
Stimpson, a fund manager at Oak Associates in Akron, Ohio.
Volume was very light after nearly two weeks of more active
trading. Just 5.76 billion shares were traded on the NYSE, Amex
and Nasdaq. The daily average this year has been around 8.8
billion shares.
Earnings in the technology sector, the S&P's largest, have
been particularly strong. Profit at Baidu, the Chinese Web
search engine, beat Wall Street estimates and the company
forecast strong demand ahead. Baidu's shares rose 4.6 percent
to $107.28.
The Dow ended lower, weighed down by American Express
<AXP.N> whose shares slipped as regulatory issues overshadowed
rising profit. Verizon Communications Inc <VZ.N> also fell
after it said additions of new wireless customers may lag.
The Dow Jones industrial average <> dropped 14.01
points, or 0.13 percent, to 11,132.56. The Standard & Poor's
500 Index <.SPX> gained 2.82 points, or 0.24 percent, to
1,183.08. The Nasdaq Composite Index <> gained 19.72
points, or 0.80 percent, to 2,479.39.
For the week the Dow and the S&P 500 each rose 0.6 percent,
while the Nasdaq climbed 0.4 percent.
Technology has led gains in the recent rally. The Nasdaq is
up more than 17 percent since the end of August compared with
the S&P 500, which is up 12.7 percent. The Nasdaq closed just
shy of its highest level since May on Friday.
Early reports from technology companies have given a mostly
rosy picture of the sector's future, including Google's
<GOOG.O> much stronger-than-expected earnings a week ago. Baidu
late Thursday gave a robust outlook for its business.
[].
Also boosting the Nasdaq were shares of online retailer
Amazon.com Inc <AMZN.O>, which gained 2.5 percent to $169.13
after Wall Street analysts raised their price targets on the
company, even as Amazon gave a disappointing forecast on
Thursday. For details, see []
Shares of American Express declined 3 percent to $39.03
while Verizon lost 1.3 percent to $32.09.
Also on the down side, Leggett & Platt Inc <LEG.N> posted a
lower-than-expected quarterly profit, hurt by weakness in its
residential furnishings market. The company also forecast 2010
earnings below market expectations. The shares lost 8.6 percent
to $21.01.
The S&P 500 sent a bullish signal as the index's 50-day
moving average crossed above its 200-day moving average, known
as a golden cross. That upward momentum indicator last occurred
in June 2009, and the benchmark index rose more than 35 percent
in the following 10 months.
However, the bullish signal doesn't always signal an up
market, says Chris Burba, short-term market technician at
Standard & Poor's in New York.
"If you get a golden cross when the market has been
consolidating for a while, you have a much higher probability
the market is going to take off," he said.
Two top Federal Reserve officials gave contrasting views on
the need for more stimulus for the U.S. economy.
[]
Growing speculation in recent weeks that the Fed will
extend the quantitative easing measures at its next meeting in
November has pressured the dollar while boosting equities.
Equities have recently traded in tandem with the euro, with
S&P futures rising along with Europe's single currency. For a
Q+A, see [].
(Reporting by Edward Krudy; Editing by Kenneth Barry)
