THE WEEK AHEAD: Wall Street awaits Oracle numbers

Apple and Intel issued profit warnings this week and yet the Nasdaq actually gained ground. Now that everyone has come clean, there's reason for optimism heading into the last few weeks of the year.

For the week, the Dow Jones industrial average gained 270 points to 10,712.91 while the Nasdaq composite rallied up 340 points to finish at 2,914.90.

A big boost came Tuesday when Federal Reserve Chairman Alan Greenspan said the Fed had to be alert to the possibility of "excessive softening" in the U.S. economy, a not-so-subtle hint that the Central Bank is at least considering an interest-rate cut.

Convention wisdom says that once the presidential election is resolved, the markets might be inclined to begin a belated Santa Claus rally, mainly because tech shares are so cheap and so much money has been patiently waiting on the sidelines.

"Most people now assume the game is over ... so I think that's taken one of the uncertainties out of the market," Alfred Kugel, senior investment strategist at Stein, Roe & Farnham, said of the election dispute. "Greenspan's talk probably addressed the second one."

Stocks were boosted Friday by the Labor Department's report that job growth remained weak in November for the second straight month, helping the unemployment rate edge up to 4.0 percent. It was the first increase in the jobless rate since August.

But it wasn't all good news.

Apple Computer (Nasdaq: AAPL) joined the profit-warning parade this week when it warned it will post a first-quarter loss of between $225 million to $250 million on sales of only $1 billion.

Analysts were expecting a profit of 3 cents a share in the quarter on sales of $1.6 billion.

Intel (Nasdaq: INTC) received a curious reaction this week after warning that its fourth-quarter sales will be flat with the $8.7 billion it recorded last quarter.

Considering the warnings from Gateway (NYSE: GTW), Micron Electronics (Nasdaq: MUEI) and Apple Computer (Nasdaq: AAPL), it was obvious the world's largest chipmaker would be pinched by slumping PC demand.

But most of this bad news had already been factored into the struggling stock.

"Intel is down from $75 to $32 and then you hit us with bad news after the close yesterday. Well, that's already in there," Prudential Securities analyst Larry Wachtel said. "How much further down can we go?"

Several analysts reiterated their "buy" rating on the stock while a couple others cut it.

Gerard Klauer Mattison & Co. analyst Jack Geraghty reiterated a "buy" rating and put a new $50 price target on the stock.

Graghty said he believes the company's overall position continues to be strong, and that the semiconductor industry slowdown is only temporary.

Despite the warning, Intel shares actually rallied with the rest of the tech sector Friday.