By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks managed some mild
gains Friday morning despite a hard selloff in IBM and Dell, as
strong gains in Microsoft and Google helped lift the sector.
The Nasdaq Composite Index (RIXF) rose 0.8% to 3,193 while the
Philadelphia Semiconductor Index (SOX) rose by 0.5% in early
trades. The Morgan Stanley High-Tech Index (MSH) fell about
0.6%.
International Business Machines (IBM) was the main weight on the
group, with its shares falling more than 6% to $194 after the
company missed Wall Street's forecast for both revenue and earnings
in its first quarter report issued Thursday afternoon.
"The stock's safe haven stature is likely to be challenged by
disappointing 1Q13 results and execution," wrote J.P. Morgan
analyst Mark Moskowitz of IBM, trimming his price target to $196
from $198. "Broad-based slowing in software and mainframe, as well
as in most regions, points to end demand headwinds, which we think
could persist."
Dell (DELL) shares slid more than 3% after Blackstone announced
it was pulling out of its previously stated plan to submit a
takeover bid for the PC maker. The stock is now trading around
$13.49 -- below the $13.65 offer price put forward by Silver Lake
and co-founder Michael Dell.
Microsoft (MSFT) shares rose nearly 4% to $29.93 after beating
analysts' forecasts for the March period, despite downbeat
sentiment heading into Thursday's report, stemming from low PC
sales for the period.
"While the speed and magnitude of consumer Win 8 adoption
remains very much in doubt, tech value stocks have become more
favored and we believe the negative sentiment on Microsoft could
ease somewhat as the company continues to execute," wrote Gregg
Moskowitz of Cowen & Co.
Google (GOOG) shares rose by 2.7% to $787. The Web search giant
beat Wall Street's earnings estimates for the first quarter, thanks
mostly to strong advertising sales.
"Our global market analysis continues to suggest that Google can
grow its core search business in the low teens over the next few
years at high incremental margins," Scott Devitt of Morgan Stanley
wrote in a note to clients. "Google may therefore be able to invest
in newer projects while keeping core operating margins about
stable."
Apple (AAPL) shares picked up some mild gains after opening in
the red. The stock was last trading at $394 -- up about 0.5% from
the previous close.
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