Wall Street mixed as Alphabet, Microsoft tumble

By Noel Randewich

(Reuters) - Wall Street was mixed on Friday as disappointing quarterly reports from Microsoft and Alphabet slammed tech stocks and weighed against a surge in oil prices that lifted energy shares.

The S&P technology sector <.SPLRCT> dropped 2.3 percent, on track for its worst daily decline since early February, with Facebook down 2.9 percent and Apple falling 1.1 percent.

Microsoft dropped 6.8 percent, contributing the biggest drag to the S&P 500, and Google's parent Alphabet lost 5.6 percent as investors punished both companies for missing profit and revenue estimates.

Helped by a softer dollar and a recovery in oil prices, the S&P 500 has recovered from a steep selloff earlier this year and is only about 2 percent short of last May's record high.

Wall Street has rock-bottom expectations as companies post their first-quarter results over the next few weeks, with S&P 500 companies on average seen reporting a 7.1-percent fall in profit, according to Thomson Reuters I/B/E/S.

Crude rose about 1.5 percent on signs of strong U.S. gasoline consumption, declining production around the world and oilfield outages.

Oil prices have moved in lockstep with U.S. stocks for several months and some investors expected more gains next week.

So far, 77 percent of first-quarter earnings have exceeded expectations, which is superior to the 63-percent beat rate in a typical quarter.

"If earnings results come in above the very low bar of expectations that are out there, and you combine that with a continued rising price of oil, that should equate to an upward trend in the market next week," said Thomas Wilson, Managing Director of Wealth Advisory at Brinker Capital.

At 1:59 pm, the Dow Jones industrial average was up 0.04 percent at 17,990.49 while the S&P 500 lost 0.12 percent to 2,088.88.

The Nasdaq Composite dropped 0.99 percent to 4,896.80, reflecting the selloff in tech shares.

Eight of the 10 major S&P sectors rose, with energy <.SPNY> up 1 percent.

Starbucks fell 5.7 percent after missing sales expectations, while Visa lost 2.1 percent after it cut full-year revenue forecast.

Advancing issues outnumbered decliners on the NYSE by 2,097 to 857. On the Nasdaq, 1,750 issues rose and 982 fell.

The S&P 500 index showed 11 new 52-week highs and two new lows, while the Nasdaq recorded 37 new highs and 17 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski)