Dell Weighs on Stocks

A disappointing outlook from Dell and renewed signs of inflation kept a lid on stocks Friday.

Dell’s fourth-quarter earnings and sales topped Wall Street forecasts, but the company’s first-quarter guidance was below estimates.

Analysts even questioned Dell’s better than expected fourth-quarter results, pointing out that they came from an extra week in the quarter, favorable tax treatment and share buybacks. Declining margins also raised concerns.

After two earnings disappointments last fall, it seems the company continues to face pressure from competitors like HP .

Still, analysts are hoping that Microsoft’s new Vista operating system will boost sales later this year.

Bank of America downgraded Dell from buy to neutral, and the stock fell 5% on the day.

Also weighing on stocks Friday was a larger than expected rise in wholesale inflation and an unexpected drop in consumer confidence. Still, the broader market managed to end the day with only modest losses.

The Nasdaq lost 12 to 2282, the S&P 500 slipped 2 to 1287, and the Dow gave back 5 to 11,115. Volume declined to 2.09 billion shares on the NYSE, and 1.95 billion on the Nasdaq. Advancers led 18-14 on the NYSE, while decliners held a 16-13 edge on the Nasdaq. Upside volume was 52% on the NYSE, and 37% on the Nasdaq. New highs-new lows were 219-18 on the NYSE, and 186-16 on the Nasdaq.

Priceline , Brocade , Ditech , Hittite and Sapient rose on their earnings news.

Intuit , Radio Shack , ADIC , Audible , Aware , Silicon Image and Talk America fell on their results.

Intel slumped 3.5% on an RBC Capital downgrade.