Dow Green This Week, Nasdaq Down 4%, and Microsoft Doing All the Work Today

The Dow Jones Industrial Average (DJINDICES: ^DJI) is the only major index in the green this week. At midday Friday, it was up about 0.3% for the day and 1% for the week. The S&P 500 (SNPINDEX: ^GSPC) hovered near breakeven on the day but was down 1.5% for the week. The Nasdaq Composite (NASDAQINDEX: ^IXIC) index fell 0.5%, extending its weekly loss to 4%.

Friday's session captured the week in miniature. Microsoft (NASDAQ: MSFT) rose nearly 5%, doing the heavy lifting across all three major indexes. Space Exploration Technologies (NASDAQ: SPCX) swung from down 2% at the open to up 2.3% by noon on Starlink mobile-service buzz. And Micron Technology (NASDAQ: MU), fresh off Thursday's 16% earnings rocket, came back to earth with a 4% price drop.

^DJI data by YCharts

Microsoft carries the load

Microsoft rose 4.9% on Friday, adding 107 points to the price-weighted Dow index and $136 billion to its own market cap. That gain rippled across all three indexes, since Microsoft ranks among the largest holdings in both the price-weighted Dow and the cap-weighted S&P 500 and Nasdaq Composite indexes.

The Dow needed every bit of that help, as the two largest point movers were bearish. Caterpillar (NYSE: CAT) went from an all-time high on Thursday to a 4.1% drop on Friday, dragging the index down by 270 points. Goldman Sachs (NYSE: GS) fell 2.8% for another 182-point hit. Together, those two stocks nearly erased the Dow's weekly gain in a single session. And neither had substantial news to share; the price drops reflected Caterpillar's and Goldman's sensitivity to macroeconomic affairs, along with their combined Dow weighting of 25.1%.

Image source: Getty Images.

While tech stocks grabbed headlines, oil kept sliding. The United States Oil Fund (NYSEMKT: USO) dropped 4.1% on Friday as Brent crude slipped to around $73 per barrel, approaching levels not seen since before the Iran conflict began in late February.

Traders are betting that more Iranian oil will reach global markets soon. Ship traffic through the Strait picked up to 62 transits in the past 24 hours, still half the normal rate, with 320 vessels waiting their turn. It's progress, albeit slow.

The declining oil price explains some of Caterpillar's reversal. Heavy equipment demand ties closely to energy-sector capital spending, and cheaper crude signals less drilling activity ahead. Goldman Sachs and other major banks fell alongside broader risk-off sentiment, even though the financial sector passed Federal Reserve stress tests earlier in the week.

Gold offered a counterpoint. The SPDR Gold Shares (NYSEMKT: GLD) fund gained 1.6%, a reminder that not everyone is ready to declare the Middle East situation resolved. Safe havens are still tempting.

The bigger picture

That's the end of a dramatic week, with modest Dow gains balanced against a broad sell-off in tech. Micron's big jump was just a recovery from Tuesday's crash, and the Middle East crisis lingers on.

One week doesn't make a trend. The Dow's outperformance may say more about its lack of chip exposure than any renewed appetite for old-economy stocks. Next week brings Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) joining the Dow on Monday, which will shift the index's tech weighting slightly higher. The Google parent's $344 share price carries more weight than its predecessor, Verizon (NYSE: VZ), at $46.

Whether the divergence between indexes continues or snaps back is anyone's guess. But weeks like this one are why long-term investors try not to check their portfolios too often.

Anders Bylund has positions in Alphabet and Micron Technology. The Motley Fool has positions in and recommends Alphabet, Caterpillar, Goldman Sachs Group, Micron Technology, and Microsoft. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.