A flat start expected on the ASX, despite a strong Dow close

The Dow Jones Industrial Average (INDEX: ^DJI) was up on Friday after three of its components reported positive earnings.

The market has fallen the past two days over poor tech earnings, worse-than-expected home sales, and unemployment numbers, as well as on growing concerns over Europe, specifically Spain. These factors combined to send the market down a little more than 1% over the past two trading days.

The S&P moved less strongly, up just 0.12%, as its broader composition dulled the impact of the good news from some Dow components.

Sentiment shifted Friday, when Microsoft (Nasdaq: MSFT) reported earnings after hours that beat the Street's expectations. Microsoft reported earnings of US$0.60 per share, while analysts had expected US$0.58. The company also reported better-than-expected revenue of US$17.4 billion versus expectations of US$17.2 billion.

Sentiment was further pushed forward by today's earnings reports from General Electric (NYSE: GE) and McDonald's (NYSE: MCD). The latter met analyst expectations, while GE beat earnings expectations by a cent. The company reported earnings of US$0.33 per share and revenue of US$35.2 billion. Both these numbers are down from last quarter — 12% and 8.2%, respectively — but were above the drops analysts had expected.

Top winner
As you may have expected, Friday's top Dow stock was Microsoft, up 4.55% to US$32.42. Fool analyst Anders Bylund took a deeper look at the company's earnings. He believes that this news, along with IBM's strong sales, shows that the enterprise-software market is healthy and that it serves as a good sign for the earnings of other high-quality software companies.

Top loser
Bank of America (NYSE: BAC) was today's worst Dow stock, down 4.68% to US$8.36. The stock fell all day after top financials analyst Mike Mayo of Credit Agricole Securities downgraded the stock from "underperform"to "sell." Mayobelieves that the company's earnings are poor and questions whether the company will ever reclaim its former strength. He wonders whether "shareholders would be better off with a more downsized company."Bank of America, for its part, has been reviewing its operations and making cuts. For more on Bank of America, Fool Analyst Austin Smith took an in-depth look at the company.

Impact on the ASX

The S&P / ASX 200 (Index: ^AXJO) and All Ordinaries (Index: ^AORD) closed at 4,366.5 and 4,444.4 points respectively on Friday.

The ASX SPI futures were up 7 points (or 0.16%) to trade at 4,375 points this morning before trade opened, pointing to a reasonably flat start on our market – though once trade begins, the market tends to pay little heed to that lead, especially  if news breaks or the 'herd' starts moving one way or the other.

The Australian dollar was buying 103.69 US cents this morning, down slightly as the market waits for Australian CPI figures and an indication of the latest thinking from the US Federal Reserve.

As always, forewarned is forearmed, but one swallow doesn't make a summer.

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