By Benjamin Pimentel
The tech sector dipped early Wednesday as shares of Texas Instruments Inc. fell on what analysts said was likely a wave of profit-taking.
The Dallas-based chip behemoth (TXN) narrowed its earnings outlook late Tuesday, pointing to a strong fourth quarter, but some analysts said investors' expectations may have been overheated.
"I think the sentiment has gone a bit too high," Wedbush analyst Patrick Wang said in a phone interview Tuesday, noting that the stock's decline after the company's mid-quarter update may have been due to investors taking profits.
In a note Wednesday, Wang said TI management "continues to flawlessly execute on its analog/embedded strategy, driving share gains and outsized growth in today's recovering economy."
Shares of TI were off nearly 3% in early trade.
TI's downward trajectory set the tone for the sector, as the Nasdaq Composite (RIXF) lost 0.3% to 2,166. The Morgan Stanley High Tech 35 Index (MSH) declined 0.3%, while the Philadelphia Semiconductor Index (SOX) fell 0.4%.
There were bright spots for the sector.
Shares of Apple Inc. (AAPL) gained 1.4% after an Oppenheimer analyst said the computer maker is ramping production on the much-anticipated tablet.
RealNetworks Inc. (RNWK) saw its shares rise more than 14% after J.P. Morgan upgraded the digital-media company's stock to neutral from underweight, citing a better-than-expected ruling in its arbitration with VeriSign Inc. (VRSN). VeriSign was down 1.3%.
Shares of Rambus Inc. (RMBS) rose more than 2% after the chip-design company reached a settlement with the European Commission on a dispute over patent royalties.