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NEW YORK - Investors dumped stocks and locked in profits Friday after the glow of a week full of strong earnings reports faded.

The retreat came as cautious forecasts from railroads stirred unease about the economy and a rising dollar pushed prices of commodities lower, which hurt materials and energy stocks. The Dow Jones industrial average fell 109 points to end the week with a modest loss.

Traders appeared eager to collect gains after earnings reports for the July-September quarter came in far stronger than forecast, pushing major stock indexes up more than 6 percent in three weeks.

"We've had such a great run that you're going to get people taking money off the table, especially at the end of the week," said Dr. Bob Froehlich, senior managing director, at Hartford Financial Services.

Analysts have been calling for the market to take more breaks after a seven-month rise that raised questions about whether the economy is recovering fast enough to warrant those gains. The Standard & Poor's 500 index is up 59.6 percent since March, though it's still down 31 percent from its peak two years ago.

The day's drop came as good news failed to galvanize traders. Home resales posted their biggest increase in 26 years in September and shares of Amazon.com rode to a new high after the Internet retailer's earnings and forecasts came in much stronger than expected. Amazon's report as well as a jump in Microsoft Corp. after its earnings report helped limit the losses of the technology-heavy Nasdaq composite index.

Amazon and Microsoft couldn't erases concern over a poor outlook and sharp profit drop from chipmaker Broadcom Corp. or the forecasts from railroad CEOs.

Those comments raised worries over how long it would take for a recovery to take hold. Union Pacific's CEO Jim Young said he expects the economy to "limp along" until unemployment starts to fall. Burlington Northern also issued a tepid forecast.

Railroads are seen as an early indicator of economic activity because of the key role they play in shipping goods to manufacturers and markets.

Linda Duessel, equity market strategist at Federated Investors, didn't see a cause for worry in the downturn, saying the market needed to pause after the massive surge it has made over the past seven months.

"The run-up has been too fast," she said. "You need to consolidate."

According to preliminary calculations, the Dow fell 109.13, or 1.1 percent, to 9,972.18. The S&P 500 index fell 13.31, or 1.2 percent, to 1,079.60. The Nasdaq composite index fell 10.82, or 0.5 percent, to 2,154.47.

For the week, the Dow lost 24 points, or 0.2 percent. The S&P 500 index fell 0.7 percent and the Nasdaq lost 0.1 percent.

Originally published by By Tim Paradis Staff Writer.

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