By Benjamin Pimentel

Most technology stocks slid Friday, weighed down by declines in shares of IBM Corp. and Advanced Micro Devices, although one analyst said the first wave of third-quarter earnings reports points to a strengthening sector.

The Nasdaq Composite Index (RIXF) lost 0.8% to close at 2,157, but the benchmark finished the first week of the earnings season in the green. The Nasdaq ended the week up 0.8%.

Thursday's batch of earnings yielded a split decision in Friday trading.

AMD (AMD) tumbled 7.3% in the session. The Sunnyvale, Calif.-based chip maker posted a narrower quarterly loss, but concerns lingered about the company's ability to compete against archrival Intel.

"With the loss situation projected to continue through 2010 despite improved sales and margin estimates, we recommend investors remain on the sidelines with AMD, pending evidence of significant improvement in operational performance," Thomas Weisel Partners analyst Kevin Cassidy said in a research note.

Meanwhile, IBM shares (IBM) sank about 5% after Big Blue reported a 14% pickup in third-quarter earnings but also posted sales declines in some of its biggest businesses.

A bright spot was Google Inc. (GOOG), shares of which rose 3.8% after the search behemoth topped Wall Street's projections.

But overall, the first wave of tech earnings reports, particularly from IBM and Intel Corp. (INTC), has reinforced the view of a rebounding sector, propelled by strong consumer demand and a corporate market poised for an up-tick.

"From the read so far from Intel, IBM, the Asia-Pacific supply-chain vendors and distributors, overall technology spending continues to hold up relatively better in this difficult macroeconomic environment," Kaufman Bros. analyst Shaw Wu said in a research note. "Consumer is better than expected while enterprise is seeing stabilization and in some cases a rebound."

Still, IBM's and AMD's share declines Friday set the pace for a near-sectorwide retreat, as other major tech players finished in the red, including Microsoft Corp. (MSFT), Dell Inc. (DELL) and Apple Inc. (AAPL).

The Morgan Stanley High Tech 35 Index (MSH) was down 1.3%, while the Philadelphia Semiconductor Index (SOX) was off 2.1%.

Rare gainers, aside from Google, included Yahoo Inc. (YHOO), Hewlett-Packard (HPQ) and Oracle Corp. (ORCL).