Dow in negative territory despite gains by Microsoft and Amazon.com

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A better-than-expected earnings report from Microsoft Corp. hasn’t been enough to bail out the stock market this morning.

Despite an 18% drop in profit and a 14% slide in sales, the software giant nonetheless fed the perception of an accelerating recovery in the technology sector by beating analyst estimates.

Microsoft reported fiscal first-quarter net income of $3.6 billion, or 40 cents a share. Analysts had projected 32 cents. Microsoft’s shares were recently up more than 7%.

Shares of online retailer Amazon.com Inc. have leapt 23% this morning after it reported blowout earnings Thursday.

Also, sales of existing homes jumped 9.4% in September as first-time home buyers raced to qualify for a tax credit before its scheduled expiration at the end of November.

Still, the Dow Jones industrial average slumped more than 1% today before recovering slightly. The Dow is crisscrossing back and forth across the 10,000 benchmark and threatening to suffer its first down week since the beginning of the month.

As of 8:45 a.m. PDT, the Dow was down 67.26 points, or 0.7%, at 10,014.05.

Energy stocks have led the market down amid a drop in oil prices. Industrial stocks also are sagging.

A bout of profit taking appears to be weighing on the market following its powerful advance and the return of worries about excessive valuations.

-- Walter Hamilton