Wall Street up on earnings but tech, banks weigh

NEW YORK (Reuters) - Stocks mostly rose on Friday, led by solid earnings from McDonald's, General Electric and Microsoft, but declines in banks and technology shares pulled indexes from their day's highs.

The Nasdaq Composite fell as SanDisk Corp led a drop in semiconductor shares with an 11.3 percent slide after its second revenue warning in as many quarters.

Apple Inc's more than 2.4 percent fall also weighed, as shares continue to struggle ahead of earnings next week. Apple shares posted back-to-back weekly declines of more than 4 percent for the first time since late December 2008.

As earnings season moves into high gear, the first wave of corporate results has been substantially stronger than expected. About 81 percent of S&P 500 companies that have reported so far have beat expectations, according to Thomson Reuters data.

The impressive rate of beats comes amid lowered expectations, but the earnings have helped stocks regain their footing after a recent pullback on less-than-inspiring U.S. economic figures and renewed worry about Europe's debt crisis.

Analysts said the weakness heading into Friday's close was in part because of caution ahead of an early indicator of China's industrial activity, expected late Sunday.

"We already know earnings are coming in better, and the market has been up quite a bit," said Doreen Mogavero, president and chief executive of Mogavero Lee & Co. in New York.

"The private-sector manufacturing data from China will be setting the pace for next week, so people are taking some profits off the table," she said.

A weaker level in China's HSBC flash purchasing managers index late in March sent equity and other risk markets lower.

The Dow Jones industrial average <.dji> rose 65.16 points, or 0.50 percent, to 13,029.26. The S&P 500 Index <.spx> gained 1.61 points, or 0.12 percent, to 1,378.53. The Nasdaq Composite <.ixic> dropped 7.11 points, or 0.24 percent, to 3,000.45.

For the week, the Dow gained 1.4 percent, the S&P 500 added 0.6 percent and the Nasdaq fell 0.4 percent, down for a third week running.

Bank of America Corp fell 4.7 percent to $8.36 after a downgrade from CLSA analyst Mike Mayo. The shares led declines in the S&P financials group <.gspf>, the second-worst performing among the S&P 500 top 10 sectors.

Microsoft Corp jumped 4.5 percent to $32.42 and was the top boost to the Dow on Friday, a day after its profit report beat Wall Street's expectations.

General Electric Co's results drove buying in industrial shares. The company said it expects double-digit earnings for the year, which helped shares rise 1.1 percent to $19.36.

Industrial conglomerate Honeywell International Inc reported higher quarterly profit and raised its 2012 earnings forecast. The stock rose 2.4 pct to $59.39.

The S&P industrial sector index <.gspi>, up 0.8 percent, was a top boost to the S&P 500.

McDonald's Corp edged up 0.7 percent to $95.94 after the world's No. 1 fast-food chain reported higher quarterly profit, helped by strong U.S. sales.

About 6.68 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE Amex, just shy of the 6.78 billion daily average so far this year.

Almost two issues rose on the NYSE for every one that fell, and despite the day's decline, three issues rose for every two that fell on the Nasdaq.

(Reporting by Rodrigo Campos, editing by Padraic Cassidy)

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