By Dan Gallagher and Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks slipped Thursday
morning, brought down by slumping PC sales data that put major
stocks like Microsoft Corp., Hewlett-Packard Co. and Intel Corp.
well into the red.
The Nasdaq Composite Index (RIXF) fell fractionally to 3,296
while the Philadelphia Semiconductor Index (SOX) dropped nearly
0.2% in early trades. The Morgan Stanley High-Tech Index (MSH) fell
by 0.5%.
Late Wednesday, IDC reported that PC sales slid nearly 14% in
the first quarter compared to the same period last year. That was
the largest quarterly decline measured by the market research firm
since it began tracking the sector in 1994 and was well below the
7.7% drop the firm had predicted for the quarter.
Microsoft (MSFT) bore the brunt of the fallout, as the
disappointing PC sales indicated weak demand for its Windows 8
operating system that just hit the market over the fall. The stock
fell more than 4.6% to $28.86 in early trades.
The firm was downgraded by at least three brokerages -- Goldman
Sachs, Normura and Hilliard Lyons -- all of whom cited the
worsening PC data as a key reason for their moves.
"Our Sell thesis is based on our view that the company faces
critical secular challenges given the deteriorating PC demand
backdrop," wrote Goldman's Heather Bellini in a note to
clients.
Intel (INTC) shares fell by 2.4% to $21.73, while Advanced Micro
Devices (AMD) fell by 3.3% to $2.52. Microsoft, Intel and AMD all
report results for the March quarter next week.
Hewlett-Packard (HPQ) took a hard hit, falling more than 5% to
$21.10. The high-tech giant has been on a strong run lately, with
its shares surging nearly 60% over the past six months -- making it
one of the top-performing tech stocks for that period.
Dell Inc. (DELL) also took losses, falling 0.5% to $14.14 --
though the company current share price is somewhat protected by a
pending buyout agreement that has drawn two other interested
bidders.
Apple (AAPL) shares slipped by 0.4% to $434. Sales of the
company's Mac computers slipped by 7.5% in the U.S. -- though its
market share edged up to 10% in the first quarter, according to
IDC>
Elsewhere in the tech sector, Netflix (NFLX) was one of the few
gainers, up 3% in early trades after the company announced an
expanded agreement with Hasbro Inc. (HAS) for kids programing.
Amazon.com (AMZN) picked up 1.1%, while Facebook (FB) rose by
1.2% and LinkedIn (LNKD) was up 2%.
Fortinet Inc. (FTNT) shares crashed more than 17% to $18, after
the network security firm cut its outlook on lower-than-expected
billings. The stock was downgraded to neutral by several brokers,
including Morgan Stanley, Bank of America/Merrill Lynch, Wells
Fargo and Needham & Co.
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