NEW YORK (CNN/Money) - U.S. stock investors have their work cut out for them Friday after Microsoft said it will pay a dividend on common stock and announced a 2-for-1 stock split but also issued a mixed profit report and a lower forecast.

Shares of IBM, Advanced Micro Devices, Sun Microsystems and Juniper Networks all fell in after-hours trading Thursday following the release of the companies' quarterly results, priming the market for a lower open Friday.

Microsoft led the list of highly influential names releasing reports after the close of trade. Microsoft (MSFT: down $0.92 to $55.35, Research, Estimates) said it will pay an annual dividend on common stock equal to 16 cents a share before the split.

The company also reported a fiscal second-quarter profit of 47 cents per share, a penny better than expected, although down from the 49 cents earned a year earlier. Sales were $8.5 billion for the quarter, below estimates of $8.6 billion.

Looking forward, the company is forecasting current-quarter revenue that is a little below estimates on earnings per share that could slightly top estimates, as well as 2003 sales and earnings that could be a little lower than currently expected.

"On the surface, the Microsoft news was terrific," said Donald Selkin, director of research at Joseph Stevens. "When a company says it's paying a dividend and announces a 2-for-1 stock split, that's usually a sign of good things to come. But then they warned about the year and said IT (information technology) spending wasn't going to pick up, and so the stock is selling."

Microsoft fell $1.73, or 3 percent, to $53.62 in after-hours trade.

The lack of a pickup in IT spending is particularly relevant as it arrives on the heels of Intel's (INTC: down $0.15 to $17.20, Research, Estimates) lackluster forecast earlier in the week.

Just after the close, IBM (IBM: down $1.54 to $86.05, Research, Estimates) reported earnings of $1.34 per share, 4 cents better than expected, but down from the $1.46 earned a year earlier. The stock fell $2.05, or 2 percent, to $84 in after-hours trade.

Additionally, a number of Nasdaq stocks reported after the bell.

Sun Microsystems (SUNW: down $0.17 to $3.70, Research, Estimates) reported breakeven results, when analysts expected it to have lost 2 cents a share in its fiscal second quarter; it lost 3 cents in the year-earlier period. Shares lost 19 cents, or 5 percent, to $3.50 in after-hours trade.

Juniper Networks (JNPR: down $0.46 to $9.23, Research, Estimates) reported a profit of a penny a share, when analysts were expecting a loss of a penny a share. The company earned a nickel a year earlier. Its shares slipped 31 cents, or 3 percent, to $8.92 afterhours.

But on the downside, chipmaker Advanced Micro Devices (AMD: down $0.25 to $7.20, Research, Estimates) reported a fourth-quarter loss of 68 cents per share, far worse than the 48 cents analysts expected. The company lost a nickel in the same period a year earlier. AMD tumbled 45 cents, or 6 percent, to $6.75.

Online auction site eBay was among the few after-hours gainers. eBay (EBAY: down $2.25 to $71.25, Research, Estimates) reported earnings of 28 cents per share for its fiscal first quarter, 4 cents better than expected and up from 14 cents a year earlier. The company also said that sales and revenue forecasts for 2003 will come in better than expected. Shares gained 36 cents, or 0.5 percent, to $71.63 in after-hours trade.

In other after-hours news, CEO Richard Parsons has now also been named chairman of AOL Time Warner (AOL: up $0.06 to $15.30, Research, Estimates), CNN/Money's parent, following the resignation of Steve Case.

The Nasdaq composite (down 15.05 to 1423.75, Charts) lost around one percent, while the Dow Jones industrial average (down 25.31 to 8697.87, Charts) and the S&P 500 index (down 3.62 to 914.60, Charts) both closed only modestly lower.

A wide variety of earnings reports from influential companies -- most of which came in better than expected in terms of the latest quarter, but more subdued than had been hoped for in terms of the months ahead -- left the market drifting for the better part of the day. But selling picked up some steam in the last hour of the session.

Many of the big companies that have already reported earnings this week, or are expected to do so in the next few sessions, traded lower.

"You've got a lot of companies that have met or have beaten reduced estimates, but there's no real surprise in that," said John Hughes, market analyst at Shields & Co. "What you're not seeing are these big companies saying, going forward, business looks good, orders are picking up, we see a turnaround. Until we get some sort of upside surprise like that, we're probably going to stay rangebound."

Shares of fellow Dow component General Motors (GM: down $0.47 to $39.73, Research, Estimates) drifted lower even though the automaker topped estimates in its latest quarter, while United Technologies (UTX: up $1.81 to $66.21, Research, Estimates) gained after the manufacturer reported better-than-expected quarterly earnings that rose sharply from the year earlier.

International Paper (IP: up $0.49 to $38.40, Research, Estimates) rose after the forest products company said fourth-quarter earnings per share will come in a little better than expected.

On the Nasdaq, Yahoo! (YHOO: down $0.83 to $18.75, Research, Estimates) lost more than 4 percent after it reported strong fourth-quarter profits, but a weak first-quarter outlook.

In other corporate news, McDonald's (MCD: down $0.84 to $15.85, Research, Estimates) lost more than 5 percent as its new chief executive unveiled some of his strategies for keeping the fast-food restaurant chain competitive. He also announced that the company will not give earnings guidance in 2003.

The market cheered the morning news that new unemployment benefits claims last week unexpectedly fell to their lowest level since November, when a big increase had been expected.

However, the day's economic news, which included a report on retail inflation in the morning and the Philadelphia Fed survey for January at midday, was insufficient to distract investors from the earnings reports.

"People are also maybe using the Iraq news as an excuse to selloff the markets," said Peter Cardillo, director of research at Global Partners Securities, referring to an early afternoon report that U.N. weapons inspectors found a number of empty chemical warheads Thursday that were in "excellent condition," according to the United Nations. The news added to the stock pressure, amping up fears about the potential for war.

Market breadth was mixed. On the New York Stock Exchange, advancers beat decliners 8 to 7 as 1.47 billion shares changed hands. On the Nasdaq, losers outpaced winners by almost 6 to 5 as 1.52 billion shares traded.

Bonds fell a little, pushing the yield of the benchmark 10-year note up to 4.07 percent. Treasury prices and yields move in opposite directions. The dollar was weaker against both the yen and the euro.

Key commodities prices rose. Light crude oil for March delivery added 36 cents to trade at $32.81 a barrel in New York. Gold for February delivery surged $7 to $358.10 in New York, following the Iraqi warhead reports.