Stocks fell sharply Friday, nearly pulling the Dow Jones industrial average below 9,000, as the imminent conclusion to profit-reporting season left the market with fewer prospects for more record-setting gains.

The Dow slid as much as 123 points to 9,020 before reversing course and closing down 78.71 at 9,064.62. The blue-chip barometer lost 102.88 points for the week, but still holds a gain of more than 14 percent in 1998.Broad-market indicators also sank for the second straight day as investors locked more gains from the stock market's latest foray into record territory. The Dow, which sank 33 points on Thursday, closed at a record 9,184.94 on Tuesday.

"It's the reality that our stock market got in front of itself," said Robert Froehlich, chief investment strategist for Kemper Funds in Chicago.

"Yes, we had a very strong earnings season. But the real foundation for the strength in earnings is that analysts lowered their estimates so much that it was very easy to meet or beat expectations. That realization has encouraged people to take some money off the table," he said, asserting that stocks could trade in a tight range until there's a better sense of how companies are faring in the second-quarter.

Underscoring the growing sentiment that there's more risk than potential on the short-term horizon, J.P. Morgan recommended that its clients trim their exposure to stocks, raise some cash and shift some money to bonds,

The Dow's slide came despite a huge gain from Hewlett-Packard, which soared 8 - or the equivalent of more than 30 Dow points - to 745/8 after a recommendation from Prudential Securities. Merck negated about half of that gain, falling 37/8 to 1161/2, but otherwise, the blue-chip barometer's losses were very broad-based.

Declining issues outnumbered advancers by more than a 2-to-1 margin on the New York Stock Exchange, where volume totaled 633.89 million shares, down from 653.19 on Thursday.

The Standard & Poor's 500-stock index fell 10.76 to 1,108.82, and the NYSE composite index fell 6.08 to 574.47.

The Nasdaq composite index, which tumbled 36 points on Thursday, fell 12.43 to 1,868.96. Among leading Nasdaq technology names, Intel fell 1 3/16 to 82 1/16 and Microsoft fell 23/8 to 921/8.

The Russell 2000 index of smaller companies fell 4.73 to 480.22, and the American Stock Exchange composite index fell 6.19 to 741.86.

Overseas, Tokyo's Nikkei stock average rose 1.6 percent, Frankfurt's DAX index fell 2 percent and London's FT-SE 100 fell 0.6 percent.