By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- An early tech rally fizzed Wednesday as shares of chip makers and Juniper retreated weighing down the sector.
The semiconductor retreat was led by Advanced Micro Devices (AMD) which fell more than 3%, while LSI Corp (LSI) lost 4% and SanDisk Corp (SNDK) declined more than 1%.
In a note, J.P. Morgan analyst Christopher Danely wrote that "most investors we met with last week indicated they are waiting for another round of estimate cuts in October and a resolution in the European financial crisis before buying semiconductor stocks."
However, Danely also argued that, in his view, "semiconductor stocks have bottomed and that investors should buy before the likely 1Q12 recovery."
That view apparently was not widely-shared by investors Wednesday morning as the Philadelphia Semiconductor Index (SOX) tumbled more than 1%. The index has lost more than 12% since Jan. 1.
The Nasdaq Composite Index (RIXF) slipped 0.4% to 2,536. The Morgan Stanley High Tech 35 Index (MSH) was mostly flat.
The sector got a lift from Jabil (JBL) shares of which were up more than 7% after the electronics contract manufacturer reported upbeat earnings and a stronger-than-expected outlook.
Amazon.com (AMZN) shares traded up more than 2% as the Internet giant geared up for its anticipated tablet announcement.
Shares of Microsoft Corp. (MSFT) also moved up by 0.8%. The company announced Wednesday that it was expanding its smart phone partnership with Samsung.
Shares of Accenture (ACN) added more than 2% after the IT services and consulting company reported a jump in profit.
Another IT services and distribution firm, Synnex Corp. (SNX) also saw its stock trade up more than 11% after the company posted strong quarterly results.
Among the notable decliners was Juniper Networks (JNPR) which was down 2.8%.
In a note, FBN Securities analyst Shelby Seyrafi initiated coverage of the stock with a sector perform rating, saying Juniper "has many new product cycles beginning, but service provider spending is slowing while Cisco is becoming more aggressive."
Seyrafi also initiated coverage of Cisco (CSCO) with an outperform rating. Cisco shares were up a fraction at last check.