By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Strong gains by Microsoft Corp.,
Google Inc. and Apple Inc. helped lift the tech sector by midday
Friday despite selloffs at IBM and Dell Inc.
The Nasdaq Composite Index (RIXF) rose 1.3% to 3,207 while the
Philadelphia Semiconductor Index (SOX) rose by 0.8% by midday. The
Morgan Stanley High-Tech Index (MSH) was down about 0.3%.
International Business Machines (IBM) was the main weight on the
group, with its shares falling more than 7% to $192.67 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 3.4% 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 $13.47 -- below the $13.65 offer price put forward by Silver
Lake and co-founder Michael Dell.
Microsoft (MSFT) shares rose 3.4% to $29.77 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 rose about 1.5% to trade at 398.20 by
midday. The stock has had a bruising week -- falling nearly 7%
since Monday's open and dropping below the $400 mark for the first
time since December of 2011.
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