NEW YORK (CNNfn) - The Nasdaq composite index fell for the second straight day Friday, as technology stocks tumbled three sessions ahead of a Federal Reserve meeting whose outcome has become increasingly uncertain.
Seeking safety from the tech rout, investors parked money in proven financial firms and consumer product makers, lifting the Dow Jones industrial average.
After rising and falling over the last five sessions, both the Dow and Nasdaq ended the week just about where they started. Analysts say the wavering signifies confusion about the direction of borrowing costs and what those costs mean for corporate profitability.
"People are saying, 'I don't know what's going to happen, but I'm going to wait around and see what the Fed does,'" said Paul McManus, director of research at Independence Investment Associates. "When everyone is uncertain, you're going to get a lot of volatility."
 Led by big losses among Internet stocks, the Nasdaq composite index fell 91.45 points, or 2.3 percent, to 3,845.39, to finish down 0.3 percent on the week.
Explaining the day's drop, Peter Cardillo, director of research at Westfalia Investments, put some of the blame on the rising price of oil. Crude prices gained for the fourth straight session Friday, reviving fears the Fed's year-long credit tightening campaign to stanch inflation may not be over.
"The market is beginning to focus on the rising price of oil," Cardillo said. "That, in my opinion, has rekindled doubt about what the Fed is going to do."
Led by J.P. Morgan, the Dow Jones industrial average gained 28.63 points to 10,404.75, to end the week down 0.4 percent. The S&P 500 fell 10.69 to 1,441.49.
"There seems to be a little bit of shifting into some of the beaten-down cyclical stocks," said Donald Selkin, chief investment officer at Joseph Gunnar. "They are rallying off of oversold conditions."
 More stocks fell than rose amid light trading volume. Declining issues on the New York Stock Exchange beat advancing ones 1,604 to 1,224, on trading volume of 848 million shares. Nasdaq losers topped winners 2,207 to 1,716. More than 1.3 billion shares changed hands.
In other markets, the dollar fell versus the yen and was little changed against the euro. Treasury securities fell. Crude oil for August delivery rose 60 cents to $32.23 a barrel.
Amazon.com falters
Weighing most on the Nasdaq, Internet stocks took a tumble after negative comments from two high-profile brokerages.
Lehman Brothers cast doubts about Amazon.com's convertible bonds, saying "we find the credit weak and deteriorating."
"Our negative thesis stems from Amazon's massive negative operating cash flows, poor working capital management and increasing debt," the Lehman research said.
At the same time, Morgan Stanley Dean Witter analyst Mary Meeker said she does not see any catalyst to lift Amazon stock until the retailer's December quarter, according to Reuters.
 Amazon.com (AMZN: Research, Estimates) fell 8-1/8 to 33-7/8, a 52-week low. Yahoo! (YHOO: Research, Estimates) lost 6-3/8 to 125-5/16 and eBay (EBAY: Research, Estimates) shed 4-5/16 to 53-7/8.
The Nasdaq began the week on a high note, climbing above the 4,000 mark Tuesday for the first time in more than two months. The Dow, meanwhile, fell sharply Tuesday and Thursday. After sizzling gains in early 2000, both indexes are down for the year. That comes in sharp contrast to 1999, when the Dow and Nasdaq posted double-digit gains.
"The market will be very volatile and uncertain," Gunnar's Selkin said. "The moves are random and there's no consistency in the markets."
The Dow's biggest gainer, J.P. Morgan (JPM: Research, Estimates), rose 2-13/16 to 118-7/8.
Among other "old economy" stocks, Alcoa (AA: Research, Estimates) rose 1-3/16 to 117-1/4, General Motors (GM: Research, Estimates) gained 1-7/16 to 61-11/16, and Coca-Cola (KO: Research, Estimates) jumped 1-3/4 to 57-7/8.
Still, Patricia Chadwick, president of Ravengate Partners and guest co-host of CNNfn's Market Call, said investors should expect an occasional retreat amid what she believes will be a solid Nasdaq advance. (378K WAV) (378K AIFF).
AOL, Time Warner get holders' vote
Shareholders of Time Warner and America Online approved their proposed merger Friday. America Online (AOL: Research, Estimates) fell 3-1/16 to 53-7/16 while Time Warner (TWX: Research, Estimates), the parent of CNNfn, shed 4-1/16 to 77-9/16.
Among other stocks in the news, Rambus (RMBS: Research, Estimates) jumped 17-9/16 to 114-11/16 after the semiconductor equipment maker reported settlement of a patent license dispute with Japan's Hitachi Ltd.
And Micron Technology (MU: Research, Estimates) rose 1-1/8 to 88. The chip maker posted a 47-cent-a-share quarterly profit late Thursday that was well ahead of the 34 cents expected by Wall Street.
The Fed ahead
The Federal Reserve's policy makers meet Tuesday and Wednesday to set interest rates.  That's when most but not all analysts forecast the central bank holding borrowing costs steady. But few rule out another rate hike in August by a Federal Reserve that has expressed concerns about inflation and the economy's rapid pace of growth.
In a bid to cool the economy and ward of inflation, the central bank raised rates six times over the last year. 
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