By Kate Gibson, MarketWatch NEW YORK (MarketWatch) -- With quarterly reporting season in full swing, the information-technology sector is by far the leader in topping expectations, with 31 of 36 tech companies, or 86%, beating sales estimates, data show. That tally, compiled by Standard & Poor's index services unit, came ahead of Microsoft Corp. (MSFT 28.16, +1.57, +5.90%) , which posted an 18% drop in third-quarter profit yet easily beat Wall Street expectations, sending the software titan's shares to a high not seen since the summer of 2008. Read more. One of just a handful of stocks currently in the green among the Dow Jones Industrial Average's 30 components, Microsoft gained 7.2% to $28.50. "The tech sector is important on both the sales and for the M&A, which is coming up. They are the biggest sector to begin with, and they have lots of cash" to spend on acquisitions, said S&P senior index analyst Howard Silverblatt. But the market is looking to tech for signs on life in both corporate expenditures, such as replacing PCs, and sales to consumers, from buying electronics to entertainment, Silverblatt said. "Sales are better, and that's important to the recovery, but still nowhere near what it was. If you're a long-term investor, we've just turned the corner," the analyst said. The tech sector's actual and estimated earnings growth for the third quarter stood at a negative 6% early Friday, improving from the minus 15% seen on Oct. 1 and the negative 20% on July 1, according to data from Thompson/Reuters. MSFT 28.15, +1.56, +5.87% 3025201510 FAJAO Technology shares account for 18.8% of the S&P's market capitalization, usurping financials, which currently account for a 15.2% of the index, down from over 20% "before we started heading downhill, back in October of '07," said Silverblatt. Before the market slide, technology represented 16%, less than half of the 34.5% it represented in March 2000, said Silverblatt. On Friday, the technology-laden Nasdaq Composite (COMP 2,163, -2.67, -0.12%) dipped 2.57 points, or 0.2%, to 2,162.72, readying it for a 0.3% weekly gain, with a rally in tech fading as falling chip stocks offset robust gains in Microsoft, Amazon.com Inc. (AMZN 117.15, +23.68, +25.34%) and Netflix Inc. (NFLX 54.10, +4.47, +9.01%) . Struggling throughout the Friday session, the Dow industrials (INDU 10,002, -79.13, -0.79%) fell 83.28 points, or 0.8%, to 9,998.03, a level positioning the blue chips for a slight weekly gain of less than 0.1%. The S&P 500 Index (SPX 1,083, -9.87, -0.90%) declined 10.69 points, or 1%, to 1,082.22, with the broad market indicator currently 0.5% off for the week. "I'm not reading too much into today," said Bruce Shalett, managing partner at New York investment bank Wynston Hill Capital, about the drop in stocks Friday. "The market is a little soft after [Fed Chairman Ben] Bernanke spoke this morning, making investors a little nervous about whatever regulation they are considering to cut systemic risk in the banking sector," he said. Read the Fed. In the week ahead, 149 S&P 500 companies and four Dow industrial firms are expected to report quarterly earnings.

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