TECH STOCKS: Tech Slide On Intel Bid, Google IPO Anniversary

Date : 08/19/2010 @ 2:56PM
Source : Dow Jones News
Stock : Brocade Communications Systems, Inc. (BRCD)
Quote : 12.73  0.0 (0.00%) @ 2:05AM

TECH STOCKS: Tech Slide On Intel Bid, Google IPO Anniversary

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By Rex Crum

The overall tech sector was in the red in Thursday with Intel Corp.'s surprise $7.7 billion deal to acquire McAfee Inc. and the sixth anniversary of Google Inc.'s initial public offering.

Intel (INTC) shares fell 3.4%, to $18.93 after the world's No. 1 semiconductor company said it would pay $48 a share to acquire McAfee (MFE) -- a 60% premium over McAfee's Wednesday closing price. Intel said McAfee would help boost the security of its mobile-wireless chip products, in particular.

"McAfee is the next step in this [mobility] strategy, and the right security partner for us," Intel Chief Executive Paul Otellini said in a statement announcing the deal.

After the deal's completion, which still needs the approval of McAfee shareholders, the company will become a wholly owned subsidiary of Intel's Software and Services Group. .

McAfee rival Symantec Inc. (SYMC) benefitted from the deal, rising 66 cents a share, or 5.2%, to $13.25.

Other chip stocks fell along with Intel, as Advanced Micro Devices Inc. (AMD) was down 2.4% to $6.41 a share and Micron Technology Inc. (MU) gave up 4% to fall to $7.15.

Google Inc. (GOOG) fell $11.20 a share to $470.68 on the sixth anniversary of the Internet search leader's IPO. In 2004, Google went public using a modified Dutch auction to price shares at $85 a share in an initial offering of $1.67 billion. Shares, however, opened at $100 apiece, providing those investors who still hold them a 370% return.

Brocade Communications Systems (BRCD) shares fell 36 cents, or more than 7%, to $4.78. Late Wednesday, the storage-technology company turned in a fiscal third-quarter profit after reporting a loss a year ago. However, Brocade's fourth-quarter earnings and revenue outlooks fell short of analysts' expectations.

Other leading tech stocks were in the red, with declines from Apple Inc. (AAPL), Oracle Corp. (ORCL), Microsoft Corp. (MSFT), Yahoo Inc. (YHOO) and SanDisk Corp. (SNDK)

One company bucking tech's downward trend was Nvidia Corp. (NVDA) with shares up 4.6% to $9.75.

The Nasdaq Composite Index (RIXF) fell about 34 points, or 1.6%, to 2,181. The overall market was disappointed by the latest first-time filings for state unemployment benefits. The number of filers unexpectedly rose last week to 500,000, the highest level since last November.

Hewlett-Packard Co. (HPQ) fell 73 cents a share, or 1.8%, to $40.63 and Dell Inc. (DELL) was off by 13 cents a share to trade at $12.07. Both computer giants report quarterly results after the market close.


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