By Benjamin Pimentel
The tech sector sank broadly into the red Tuesday, weighed down
by declining prices for semiconductor shares.
A ratings upgrade of chip giant Texas Instruments (TXN) -- to
outperform from market perform by FBR Capital, which cited
expectations of a robust holiday season -- held out prospects for
the session beginning on an upbeat note.
"It's beginning to look a lot like Christmas," FBR analyst Craig
Berger said in a note.
The TI upgrade, as well as Berger's "continued positive stance"
on the chip sector, rests on expectations that "holiday
sell-through will be reasonably solid" for the fourth quarter, he
wrote.
But in Tuesday's trading, at least, many chip investors weren't
so sure.
TI was up a fraction at last check, but other chip makers were
in negative territory, including Advanced Micro Devices (AMD),
shares of which traded down more than 5%, and Nvidia Corp. (NVDA),
down more 4%.
The sector also took a hit as shares of Zoran Corp. (ZRAN)
plunged more than 11%. The chip maker, which issued a disappointing
outlook, was downgraded to hold from buy by Lazard Capital.
The Philadelphia Semiconductor Index (SOX) fell 2.6%, while the
Nasdaq Composite Index (RIXF) sank 1.3% to 2,114. The Morgan
Stanley High Tech 35 Index (MSH) was off 1.9%.
A bright spot came from IAC/InterActive Corp (IACI) shares of
which were up a fraction after the Internet company swung to a
third-quarter profit.