By Rex Crum
Tech stocks slumped in afternoon trading Thursday, led by big
declines by the likes of Nvidia Corp., Akamai Technologies Inc. and
Symantec Corp. following a combination of negative forecasts and
analysts' ratings downgrades.
The Nasdaq Composite Index (RIXF) gave up its small gains and
turned south, falling almost 20 points to 2,244. The Philadelphia
Semiconductor Index (SOX) shed more than 2% and the Morgan Stanley
High Tech 35 Index (MSH) was off by about 1%.
Nvidia (NVDA) was one of the most-notable decliners, falling 95
cents a share, or more than 9%, to $9.18 after the graphics chip
maker slashed its second-quarter revenue forecast late Wednesday.
Nvidia now expects to report sales of $800 million to $820 million,
down from its prior forecast of $950 million to $970 million in
revenue.
FBR Capital Markets analyst Craig Berger cut his rating on
Nvidia's stock to market perform from outperform and also lowered
his price target on the company's stock to $10 a share from $18. In
a research note, Berger said one of the reasons for the downgrade
was that "Apple may expel Nvidia's chipsets from its PCs sooner
than expected."
Berger also cut his rating on Advanced Micro Devices Inc. (AMD)
to market perform from outperform, due to sector weakness and
execution issues at the No. 2 PC chip maker. AMD's shares fell 22
cents, or almost 3%, to $7.77.
Another FBR analyst, Daniel Ives, cut his rating on
security-software company Symantec (SYMC). Ives cited Symantec's
"soft June results and weak outlook," for the ratings cut. Late
Wednesday, Symantec reported an increase in its quarterly earnings,
but gave a forecast that disappointed Wall Street analysts.
Symantec's shares gave up $1.50, or more than 10%, to slide to
$13.18.
Akamai Technologies Inc. (AKAM) fell $5.65 a share, or more than
12%, to $38.60 after the company reported second-quarter results
late Wednesday that were in line with expectations, but failed to
raised its third-quarter estimates above analysts' prior
forecasts.
Chip maker LSI Corp. (LSI) was also having a rough go. The
company's shares fell 59 cents, or 12.5%, to $4.16 after LSI on
Wednesday reported second-quarter profit, but gave a
weaker-than-expected third-quarter forecast.
Other losses came from Broadcom Corp. (BRCM), Intel Corp.
(INTC), Hewlett-Packard Co. (HPQ) and Research In Motion Ltd.
(RIMM).
Despite the broad losses, some sector leaders managed to eke out
small gains.
Microsoft Corp. (MSFT) remained up by 12 cents a share at $25.98
as the company prepared to hold its annual analyst day meeting at
its Redmond, Wash. headquarters.
Motorola Inc. (MOT) rose 17 cents, or 2.2%, to $7.84 after the
mobile-communications company reported a sharp increase in its
second-quarter earnings before the market opened.
Business-software company Citrix Systems Inc. (CTXS) surged by
$8.67 a share, or more than 18%, to $56.09 following the company's
strong second-quarter results and upbeat outlook. Robert W. Baird
analyst Steven Ashley raised his rating on Citrix's stock to
outperform, or buy, following the company's report.
Sony Corp. (SNE) shares climbed $2.33, or 8%, to $31.89 after
the consumer-electronics and entertainment company reported a
first-quarter profit, turning around from a loss in the same period
a year ago.