Wall St slips after record highs, tech shares weigh

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks dipped on Friday, edging back from record highs as the technology sector weighed heavily a day after Microsoft and Google reported disappointing results.

Microsoft Corp was the biggest drag on the three major indexes, with the Nasdaq showing the steepest declines. Google Inc also dragged on the S&P 500 and Nasdaq as both companies reported earnings that fell short of expectations.

Microsoft slumped 10.9 percent to $31.56, while Google lost 1.1 percent to $901.50. The S&P tech sector <.SPLRCT> led declines, falling 2 percent.

"As with every earnings season, you have some high profile misses, but still the market is obviously taking it in stride," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio. "We think it's encouraging we're shaking off the tech disappointments."

The Dow Jones industrial average dropped 28.61 points, or 0.18 percent, to 15,519.93. The Standard & Poor's 500 Index dropped 0.97 points, or 0.06 percent, to 1,688.40. The Nasdaq Composite Index dropped 28.93 points, or 0.80 percent, to 3,582.34.

""As long as companies can beat the lowered estimates - and the bar is definitely set low - they should be rewarded. On the flip side, if they miss, they will be just as much punished," Detrick said.

Also in the tech sector, Advanced Micro Devices Inc tumbled 14.2 percent to $3.98 after the company said gross margins would fall, even as the chipmaker forecast stronger-than-expected revenue growth in the third quarter.

Still, encouraging earnings reports from other companies helped keep the S&P 500 near break-even.

General Electric Co and Schlumberger NV both reported better-than-expected results, sending their shares higher. Dow component GE rose 4.5 percent to $24.70, while Schlumberger was up 5.6 percent to $82.87 as the biggest boosts to the benchmark S&P index.

In the absence of fresh economic data, the high-profile earnings disappointments in the tech sector prompted investors to lock in profits after some rosy results and reassuring comments from Federal Reserve Chairman Ben Bernanke on Thursday sent the Dow and S&P to record closing levels. The benchmark S&P is up more than 18 percent for the year.

Analysts expect S&P 500 companies' second-quarter earnings to have grown 2.9 percent from a year earlier, with revenue up 1.1 percent, according to Thomson Reuters data.

Through Friday, of the 104 companies in the S&P 500 that have reported earnings for the quarter, 65.4 percent have reported earnings above analyst expectations, while 51 percent have topped revenue estimates.

Among other companies to report, Whirlpool Corp climbed 7.4 percent to $128.20 after raising its full-year outlook.

Intuitive Surgical Inc slid 11.9 percent to $371.44 after the company cut its 2013 sales forecast and said U.S. regulators had issued a warning after an inspection of its facilities.

(Additional reporting by Leah Schnurr; Editing by Kenneth Barry)