Citi and IBM support Dow, tech hurts Nasdaq

By Herbert Lash

NEW YORK (Reuters) - Favorable results from No. 1 U.S. bank Citigroup and technology leader IBM drove the Dow higher on Friday, but the Nasdaq fell on disappointing results from tech icons Google and Microsoft.

Oil prices fell for a fourth straight day as tensions eased between Iran and the West and on growing concerns that a sluggish economy will slash demand pushed oil lower.

Oil slipped below $129 a barrel, extending a slide that has cut prices nearly 13 percent from last week's record peak.

The dollar rose against major currencies after Citigroup's less-than-expected quarterly loss eased investors' grim outlook for the U.S. financial sector.

U.S. and euro zone government debt prices fell as Citigroup's results caused investors to unwind their recent flight to safety.

Citigroup's less-than-expected $2.5 billion loss helped financial stocks rally for a third straight session.

But Google and Microsoft helped drag the Nasdaq down more than 1 percent. Google shares posted their the biggest one-day percentage drop since the Web search company went public in 2004, after Google posted a weaker-than-expected rise in its quarterly profit.

Microsoft shares declined the most in two years after the software maker's quarterly results fell short of expectations.