By Dan Gallagher and Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Slumping PC sales data put shares
of Microsoft Corp., Hewlett-Packard Co. and Intel Corp. well into
the red, but the tech sector got a lift from Netflix and
social-media stocks, led by Facebook.
The Nasdaq Composite Index (RIXF) turned positive after a wobbly
start, rising 3 points to close at 3,300.
The Philadelphia Semiconductor Index (SOX) and the Morgan
Stanley High-Tech Index (MSH) were each off a fraction.
Late Wednesday, IDC reported that PC sales slid nearly 14% in
the first quarter compared with 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
traded down 4.4% to close at $28.93.
The firm was downgraded by at least three brokerages -- Goldman
Sachs, Nomura 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% to close at $21.82 , while
Advanced Micro Devices (AMD) fell by more than 3% to close at
$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 6% to
close at $20.88. 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 1.2% to close at
$14.04 -- 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 0.3% to close at $434.33. 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 4.2% to close at $173.01 after the company announced an
expanded agreement with Hasbro Inc. (HAS) for kids programing.
Amazon.com (AMZN) picked up 1.9% to close at $269.85, as the
sector also got a lift from social-media companies. Facebook (FB)
rose by 1.6% to close at $28.02 and LinkedIn (LNKD) was up 1.6%
closing at $180.18.
Yahoo (YHOO) was also up 1.2% closing at $24.48, while Yelp
(YELP) gained 2.3% to close at $26.35 and Groupon Inc. (GRPN) added
5.2% to close at $6.43.
Fortinet Inc. (FTNT) shares crashed 13% to close at $18.99,
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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