Profit taking drags down US stocks US equities sold off on Friday following three days of gains that had propelled the benchmark index to a two-month high during the previous session. Broad-based losses on Wall Street were led by the financial, industrial and materials sectors. "After a strong run for the markets amid the absence of headlines from Europe and corporate earnings, in terms of the bottom line better than expected, pressure on Spanish authorities once again takes center stage making profit taking prudent today," said Quincy Krosby, chief equities strategist at Prudential. "Because of the pressure mounting in Spain, the US dollar has strengthened against the euro, typically a negative for US equities," she added. The S&P 500 opened 0.6 per cent lower at 1,375 points, but still registered a small gain for the week that saw a barrage of earnings reports, the Fed chairman Ben Bernanke's twice-yearly testimony to Congress and a batch of mixed economic data. The Dow Jones Industrial Average lost 0.6 per cent to 12,862.57 and the technology-heavy Nasdaq Composite Index increased 0.5 per cent to 2,951.21. In earnings news, General Electric shares rose 0.7 per cent to $19.94 as the US industrial goods producer reported a rise in earnings and reaffirmed profit growth expectations. "We maintain our $24 target price, as we see long-cycle emerging market industrial strength and improving global real estate values in finance more than offsetting a worsening Europe for GE," Richard Tortoriello, S&P Capital IQ analyst, wrote in a note reiterating "buy" opinion. Microsoft reported its first quarterly loss as a public company after the market close on Thursday, however the $492m loss was less than analysts estimated. The stock gained 0.7 per cent to $30.99 on Friday. Angelo Zino, S&P Capital IQ analyst, also reiterated a "buy" recommendation for the software group: "We positively view a number of upcoming product releases, namely Windows 8, and think Microsoft continues to maintain tight cost controls." Google shares rallied in after-hours trading on Thursday, as the internet search group reported a rise in profits for the second quarter. The company shares rose 2 per cent to $606.01 on Friday. Yahoo shares slipped 0.1 per cent, as the company revealed the pay package for its new chief executive Marissa Mayer, who will receive an annual base salary of $1m, plus a bonus of up to 400 per cent if she exceeds targets, according to Securities and Exchange Commission filings posted on Thursday. DirecTV has agreed to restore Viacom's networks to its 20m subscribers after a programming blackout that lasted more than a week in a dispute over fees. Shares in DirecTV slipped 0.4 per cent to $48.74, while Viacom added 1 per cent to $47.12. Baker Hughes and SanDisk were the best performing stocks on Friday, both rising more than 10 per cent. Sandisk shares rallied 14.3 per cent to $40.10 after the flash-memory card maker reported earnings that beat analysts estimates. Baker Hughes shares rose 10.63 per cent to $46.19 after the oilfield-services company reported second-quarter profits above estimates. In contrast, Chipotle Mexican, a fast food restaurant chain, slumped 17 per cent to $334.85 as the company's earnings missed consensus forecast.