NEW YORK (CNN/Money) - Wall St. snapped a five-session losing streak Friday on a late-day rally in blue chips, financials and select tech names that nonetheless failed to trump the impact of a down week, in which investor confidence fell on weak corporate forecasts and accounting worries.
The Dow Jones industrial average closed the week down 163 points or 1.7 percent, at 9,744.24. The Nasdaq composite lost 92.3 points, or 4.8 percent, to end the week at 1,818.88. The Standard & Poor's 500 index lost 26 points, or 2.3 percent, to finish the week at 1,096.22.
Merrill Lynch upgraded Sun Microsystems (SUNW: up $0.53 to $9.75, Research, Estimates), the largest maker of Unix servers, to "buy" from "neutral," based on what the firm heard about strategy at Sun's Analysts Day meeting Wednesday.
J.P. Morgan upgraded WorldCom (WCOM: up $0.66 to $8.18, Research, Estimates), the telephone and data services provider, to "buy" from "long-term buy" with a $12 target, saying the company's recent guidance is realistic and that accounting issues have been clarified.
The Dow drew strength from financials like Citigroup (C: up $1.35 to $45.49, Research, Estimates) and J.P. Morgan, while shares of Honeywell (HON: down $1.21 to $32.71, Research, Estimates) traded down after a New York State court ruled against the aerospace and defense maker in an asbestos case.
"It's been a good tone this afternoon. We had some money moving off the sidelines and into the markets late in the day," Mike Murphy, head of equity trading, Wachovia Securities, told CNNfn's Street Sweep.
However, the eleventh-hour gain follows a five-day losing streak in which tech leader Cisco's murky forecast and the constant reminder of accounting irregularities in the form of Enron's televised congressional hearings undermined investor confidence.
"The market is nervous. We're in a transition period as we get through all the accounting issues," Alan Skrainka, chief market strategist at Edward Jones, told CNNfn's The Money Gang.
In international trade Friday, European bourses closed mixed to lower, while Asian markets closed higher. Treasurys were higher, with the 10-year note yielding 4.87 percent, down from 4.91 percent Thursday.
The dollar was stronger against both the euro and the yen. Light crude oil futures rose 58 cents to $20.26 a barrel in New York. In Chicago, gold futures rose $3.80 to $304.40.
Market breadth was positive. On the New York Stock Exchange, advancers beat decliners 2-to-1 as 1.35 billion shares changed hands. On the Nasdaq, winners topped losers by ore than 2-to-1 as 1.78 billion shares traded.
Financials, techs in focus
Biotechs, Internets, select telecoms and networking issues gave the Nasdaq a boost, while chips, computer hardware and software were more prickly.
IBM (IBM: up $1.08 to $104.99, Research, Estimates), International Paper (IP: up $1.31 to $41.99, Research, Estimates) and 3M (MMM: up $1.70 to $111.21, Research, Estimates) added to the gains on the Dow, where 23 of 30 issues closed higher on the day.
VeriSign (VRSN: up $2.96 to $27.06, Research, Estimates), a company that has had the dreaded "A" word, accounting, bandied about it, turned around in early trade after Bear Stearns upgraded the computer security and Web address provider to "attractive" from "neutral," saying it is comfortable with the company's balance sheet.
U.S. Bancorp Piper Jaffrey upgraded Triquint Semiconductor (TQNT: up $0.74 to $10.49, Research, Estimates) to "market perform" from "underperform" after the maker of chips for wireless phones said it expects to see breakeven or a slight per-share loss in the first quarter as business in 2002 starts to recover.
Media conglomerate AOL Time Warner (AOL: up $1.91 to $27.36, Research, Estimates), which hit a three-year low earlier in the week, rose after an SEC filing revealed that CEO Steve Case purchased 1 million shares of the stock earlier in the month as a show of confidence. AOL is the parent of CNN/Money.
Shares of Corning (GLW: up $1.08 to $7.52, Research, Estimates) rose after the fiber-optic component maker said it should see a first-quarter loss in a range that includes Wall Street's current estimates and that the quarter should represent a bottoming-out for the company.
Merrill Lynch added American International Group (AIG: up $2.89 to $74.00, Research, Estimates) to its Focus One List after the insurance provider reported net income of 70 cents a share, missing estimates by 8 cents a share but improving on the 68 cents a share earned a year earlier.
Providian Financial (PVN: up $0.70 to $4.16, Research, Estimates), a credit card issuer, was upgraded to "buy" from "neutral" by Merrill Lynch. The firm attributed this to the surprisingly good shape of the company's balance sheet.
According to Briefing.com, wireless network builder Qualcomm (QCOM: down $1.65 to $37.46, Research, Estimates) was sharply lower following a note from the Center for Financial Research & Analysis that drew into question potential accounting irregularities and potential conflicts of interest between the company's auditor and board of directors.
Credit Suisse First Boston and Bear Stearns were among the brokerage firms cutting their ratings on Electronic Data Systems Corp. (EDS: down $1.50 to $57.50, Research, Estimates), a computer services company. The company reported fourth-quarter revenue late Thursday that missed estimates, while earnings grew 20 percent from a year earlier, excluding a one-time credit.
CNN confirmed that the FBI is investigating bankrupt fiber-optic and telecommunications company Global Crossing.
On Thursday, former Enron CEO Jeffrey Skilling told a congressional panel that he had no knowledge of any deals the energy trading firm may have made to hide debt. A number of other current and former executives chose to invoke the Fifth Amendment and not testify.
WorldCom and conglomerate Tyco International (TYC: up $1.83 to $29.88, Research, Estimates), both of whose accounting practices have been questioned, have reassured investors in the last few sessions. Yet, with the Enron hearings ongoing, some investors remain nervous.
"We're not going to see a significant upside until we get a clearer sense of how companies make their money and how it is accounted for," Charles Pradilla, chief investment strategist at S.G. Cowen, told CNNfn's Before Hours. 
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