July 19, 2013 at 2:28 PM CDT - Updated July 25 at 4:09 PM
By STEVE ROTHWELL AP Markets Writer
NEW YORK (AP) - Stocks edged back from record levels in early trading Friday, led by a slump in the technology sector after Microsoft and Google reported disappointing earnings.
Microsoft fell sharply after the company wrote off $900 million for expected losses on its Surface tablet and reported declining revenues for its Windows operating system. Google dropped after it reported revenues that fell below analysts' forecasts, partly because the Internet search leader's ad prices took an unexpected turn for the worse.
Chipmaker Advanced Micro Devices also posted earnings that worried investors. The company's stock plunged 69 cents, or 14 percent, to $3.97 after it announced a second-quarter loss on lower revenue stemming from a worldwide slump in PC demand.
Technology "has definitely been a sector that people have been expecting big things from and it has not delivered," said Randy Frederick, Managing Director of Active Trading & Derivatives at the Schwab Center for Financial Research.
The Dow Jones industrial average fell 38 points, or 0.3 percent, to 15,511 as of 10:30 a.m. Eastern Daylight Time. The Standard & Poor's 500 index dropped three points, or 0.2 percent, to 1,685. The technology-heavy Nasdaq composite fell 30 points, or 0.8 percent, to 3,582.
Microsoft dropped $3.31, or 9.4 percent, to $32.32. Google fell $28.60, or 3.1 percent, $881.50.
The stock market is still up sharply in July after the Federal Reserve reassured investors that it won't pull back on its economic stimulus before the economy is strong enough. The U.S. central bank if currently buying $85 billion of bonds a month to keep long-term interest rates low and encourage borrowing and hiring.
The S&P 500 has gained 4.9 percent this month and is track to log its best month since January. The index is up 18 percent on the year.
In government bond trading, the yield on the 10-year Treasury note fell to 2.50 percent from 2.53 percent late Thursday.
The price of crude oil edged higher and is the highest it's been in 16 months. Oil rose 24 cents, or 0.2 percent, to $108.06. The price of gold climbed $8.30, or 0.65 percent, to $1,292.50 an ounce.
Among other stocks making big moves:
- General Electric rose $1.09, or 4.5 percent, to $24.70 after posted a slight gain in net income in the second quarter and said its U.S. operations are picking up steam. The results were better than analysts had forecast.
- Chipotle Mexican Grill stock climbed $19.42, or 5 percent, to $396 after the Mexican fast-food chain reported results that beat analysts' expectations.
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