Yahoo!, Intel earnings on deck

But after investors cashed in their profits, the bull market regained its momentum Friday.

For the week, the Dow Jones industrial average gained 25 points to close at a record high of 11,522.56 while the tech-laden Nasdaq composite plunged 146 points to 3,882.51.

It didn't help matters that both Gateway and Lucent issued profit warnings, essentially saying they were unable to meet demand in their latest quarters due to a lack of components.

While it's never good to have bellwethers like Gateway and Lucent issuing profit warnings, investors can take some solace in the fact that demand remains strong. We're also seeing a surge in enterprise software makers such as SAP and PeopleSoft , showing the market is rotating into some of the beaten down sectors.

There's also the nasty interest rate question lingering above Wall Street. Conventional wisdom seems to change every five minutes, but the latest buzz is the Fed will leave rates unchanged when it meets in early February.

Of course, that's subject to change at any second. "It's the beginning of the year, people are concerned about putting money to work. Yet at the same time, people really have to pay attention to the referee, which is the Fed," said Richard Babson, the chairman and president of Babson-United Investment Advisors.

On Friday, the US Labour Department reported that December's non-farm payrolls grew by 315,000, exceeding the increase of 224,000 forecast by economists polled by Reuters.

The jobless rate matched consensus at 4.1 percent, which was unchanged from the prior month. But average hourly earnings rose 0.4 percent, against an expected 0.3 percent increase.

More fuel for Greenspan & Co. to raise rates or a sign that the economy is doing fine on its own?

Looking ahead to next week, a pair of key technology earnings reports are due out from Intel and Yahoo!.

Intel's taken some bad press of late due to its alleged inability to manufacture enough chips and motherboards for Gateway.

Analysts are expecting Intel to earn 63 cents a share in its fourth quarter. Last quarter, Intel missed analysts' estimates, earning $1.9bn (£1.178bn), or 55 cents a share, on sales of $7.3bn.

Company officials blamed the shortfall mainly on shrinking profit margins, a problem that doesn't appear to be going away anytime soon.

Intel shares closed up 3 1/4 to 82 Friday, well off its 52-week high of 89 1/2 set in September.

Thirty-two of the 38 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.

Yahoo! has seen its stock plummet since peaking at 500 1/8 earlier this month. Its shares closed up 39 1/16 to 407 1/4 Friday.

First Call consensus expects it to earn 15 cents a share in its fourth quarter. Of course, sales will be the key.

Last quarter, Yahoo! pocketed $40.4m, or 14 cents a share, on sales of $155.1m. Its shares were trading at a paltry 110 in August.

Twenty-nine of the 33 analysts watching Yahoo! rate it either a "buy" or "strong buy."

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