By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks closed mixed on Friday, as investors showed renewed interest in technology shares, while the broad market remained under pressure and posted weekly losses amid caution about rising long-term interest rates in the bond market.
"There was a lot of volatility in this market this week and this is more of the same," said Art Hogan, market strategist at Jefferies & Co. "We're getting oversized reactions to incremental news, whether it's the economy or earnings."
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.92% overcame early weakness to close in positive territory, amid gains by the likes of Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +0.64% and Cisco Systems Inc. /zigman2/quotes/209509471/composite CSCO +0.47% . The tech-heavy index still fell 0.6% for the week, as crude oil prices rallied back after their recent slide and sapped buying interest for techs.
The Dow /zigman2/quotes/210598065/realtime DJIA +0.13% closed down 15 points at 12,487, after coming off an early low of 12,431. Honeywell International Inc. /zigman2/quotes/205583690/composite HON +0.83% weighed on blue-chips, losing 0.2% after its 2007 outlook disappointed investors.
The blue-chip average lost 0.6% for the week.
The market opened under pressure after news of strong durable goods orders and new home sales in December added to pressure on bond prices and sent their yields - which are used to benchmark mortgage rates and other loan rates - to five-month highs. See Bonds.
The move led to selling in rate-sensitive sectors, such as financials and consumer-related stocks.
"There's a great amount of uncertainty regarding interest rates and the economy," said Michael Sheldon, chief market strategist at Spencer Clark. "That combination has set the backdrop for an overdue correction, which may be in its early stages."
Among blue chips, General Motors Corp. /zigman2/quotes/205226835/composite GM -0.88% fell 0.6% after saying it will delay its fourth-quarter and year-end earnings report, and again restate several years of financial results.
Among the few Dow gainers, Caterpillar /zigman2/quotes/203434128/composite CAT +0.26% shares gained 2.5% after its revenue topped expectations. And Microsoft rose 0.5% after the company late Thursday said its quarterly sales rose a better-than-forecast 6% amid strong demand for its Xbox 360 video game player. See full story.
According to Ralph Russell, money manager at RalphRussel.org, there is "a lot of nervousness" on Wall Street. Amid the jitters about rising rates, he expects a pull-back and a pause, after the market's almost-uninterrupted run since July. Listen to Russell.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.24% dropped nearly 2 points to 1,422 and fell 0.6% for the week.
But the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.92% rose 1.2 points to close at 2,439, after a late session rally on Friday.
Among tech shares, Cisco Systems /zigman2/quotes/209509471/composite CSCO +0.47% bounced back from an early loss to gain 0.5%, even after being downgraded by Citigroup to hold from buy.