Conflicting bullish and bearish signals from recent earnings reports from technology companies threaten the recent rally in tech stocks and muddy the outlook for the sector.

Friday, printer maker Xerox Corp. (XRX) and mobile phone giant Sony Ericsson cut dramatically their first-quarter guidance and indicated a difficult market this quarter for tech companies. Contradicting that, though, are recent bullish comments from software giants Oracle Corp. (ORCL) and Adobe Systems Inc. (ADBE), which have contributed to a 15% gain this month in the Morgan Stanley Technology Index.

"You're going to have conflicting signals at this stage because you are looking at a global economy that is trying to reinflate," said Quincy Krosby, chief investment strategist at The Hartford.

Also contributing to the recent stock rally may be the sense that the tech sector simply looks safer than other industries.

"What's interesting about tech is that it's both defensive and offensive," Krosby said. "Each investor has a different way of looking at tech, but the common denominator of tech is that they don't hold toxic assets."

Xerox's announcement Friday morning that it expects first-quarter earnings well below already-downbeat expectations because of slumping corporate spending added to several reports in recent weeks that many companies are seeing further deterioration in the market after a dismal fourth quarter.

Phone maker Sony Ericsson, a joint venture between Sweden's LM Ericsson Telephone Co. (ERIC) and Japan's Sony Corp. (SNE), also said Friday it sees a larger-than-expected first-quarter loss.

Xerox supplies IT hardware and printing services to businesses around the globe, while Sony Ericsson makes mobile phones for consumers mostly in developed markets, giving the two tech giants together a wide view of the market.

Anne Mulcahy, Xerox's chief executive, cautioned that industry prospects didn't look bright in the near term: "Enterprise spending on technology will continue to decline this year."

Xerox shares fell 15% to $4.56, while shares of Sony and Ericsson, were down 1.5% and 9.7%, respectively. Meanwhile, shares in Sony Ericsson rival Nokia Corp. (NOK) dropped 6.6% to $11.24 and printer maker Lexmark International Inc. (LXK) fell 4.9% to $16.01.

The news led Shannon Cross of Cross Research to warn about the revenue expectations of other printer makers and IT hardware companies, including Hewlett-Packard Co. (HPQ), Dell Inc. (DELL) and EMC Corp. (EMC). Despite the fresh concerns, the stocks opened higher Friday before eventually sliding along with the broader market.

Likewise, the Morgan Stanley Technology Index rose at the open and has fallen along with the broader market, down 3.4% on the day.

Even before the warnings Friday, market observers were wondering about the sustainability of the recent tech rally. For example, on semiconductor stocks, often considered a leading indicator of sector trends, analysts are beginning to hint that the stock gains in the segment since the beginning of this year may retreat.

The Philadelphia Semiconductor Index is up 26% from its bottom in November. Last week, Wedbush Morgan analyst Patrick Wang told clients to beware of a "W" shaped recovery as the recent uptick could falter, and Daniel Berenbaum of Auriga recently told investors to sell the rally.

However, those opinions were in contrast to recent comments expressing cautious optimism from tech bellwethers.

Mark Garrett, Adobe Systems' chief financial officer, said Tuesday that while economic conditions deteriorated during the first quarter, it saw signs of "stabilization" from early February onwards. "Since the beginning of February we've seen much more stability in the business, particularly in North America," Garrett said.

Elsewhere, the Redwood City, Calif.-based Oracle impressed Wall Street Wednesday by beating its fiscal third-quarter earnings expectations and delivering in-line revenues, sending shares up by as much as 12% the following day.

The divergent reports suggest that while the overall sector is rallying, much of the strength may be driven by particularly robust companies, with the larger segment of the sector remaining mostly rangebound.

For instance, analysts were encouraged by Oracle's performance, but they cautioned that the company may be an outlier among technology stocks.

"Oracle has a unique advantage through its (product) reach and is a very disciplined company, so it's hard to draw too many conclusions about the rest of the sector," Citigroup analyst Brent Thill said.

Overall, though, Wall Street may see tech as a safer spot than others even as demand sags.

"The benefits of cost-cutting could start to show in the companies' financials," said Trip Chowdhry of Global Equities Research, "But there is no evidence whatsoever based on our research that there is any uptick in demand."

- By Jerry A. DiColo; Dow Jones Newswires; 201-938-5670; jerry.dicolo@dowjones.com

(Jessica Hodgson contributed to this report.)