* Baidu shares jump a day after earnings
* American Express, Verizon weigh on Dow
* Dow down 0.1 pct, S&P up 0.2 pct; Nasdaq up 0.8 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to close)
By Edward Krudy
NEW YORK, Oct 22 (Reuters) - U.S. stocks capped a third
straight week of gains on Friday as encouraging earnings helped
the market sustain upward momentum, led by Baidu Inc
The market has defied expectations for a pullback following a strong rally prior to the earnings season. Some investors were expecting the results to provide an excuse for broad profit-taking.
"To get decent earnings after a nice little rally in the market and have the market sustain the gains or even achieve a little more is a really good thing and bodes well," said Robert Stimpson, a fund manager at Oak Associates in Akron, Ohio.
Volume was very light after nearly two weeks of more active trading. Just 5.76 billion shares were traded on the NYSE, Amex and Nasdaq. The daily average this year has been around 8.8 billion shares.
Earnings in the technology sector, the S&P's largest, have been particularly strong. Profit at Baidu, the Chinese Web search engine, beat Wall Street estimates and the company forecast strong demand ahead. Baidu's shares rose 4.6 percent to $107.28.
The Dow ended lower, weighed down by American Express
The Dow Jones industrial average <.DJI> dropped 14.01 points, or 0.13 percent, to 11,132.56. The Standard & Poor's 500 Index <.SPX> gained 2.82 points, or 0.24 percent, to 1,183.08. The Nasdaq Composite Index <.IXIC> gained 19.72 points, or 0.80 percent, to 2,479.39.
For the week the Dow and the S&P 500 each rose 0.6 percent, while the Nasdaq climbed 0.4 percent.
Technology has led gains in the recent rally. The Nasdaq is up more than 17 percent since the end of August compared with the S&P 500, which is up 12.7 percent. The Nasdaq closed just shy of its highest level since May on Friday.
Early reports from technology companies have given a mostly
rosy picture of the sector's future, including Google's
Also boosting the Nasdaq were shares of online retailer
Amazon.com Inc
Shares of American Express declined 3 percent to $39.03 while Verizon lost 1.3 percent to $32.09.
Also on the down side, Leggett & Platt Inc
The S&P 500 sent a bullish signal as the index's 50-day moving average crossed above its 200-day moving average, known as a golden cross. That upward momentum indicator last occurred in June 2009, and the benchmark index rose more than 35 percent in the following 10 months.
However, the bullish signal doesn't always signal an up market, says Chris Burba, short-term market technician at Standard & Poor's in New York.
"If you get a golden cross when the market has been consolidating for a while, you have a much higher probability the market is going to take off," he said.
Two top Federal Reserve officials gave contrasting views on the need for more stimulus for the U.S. economy. [ID:nN21128261]
Growing speculation in recent weeks that the Fed will extend the quantitative easing measures at its next meeting in November has pressured the dollar while boosting equities.
Equities have recently traded in tandem with the euro, with S&P futures rising along with Europe's single currency. For a Q+A, see [ID:nN2199257]. (Reporting by Edward Krudy; Editing by Kenneth Barry)