By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Technology stocks opened with
gains Monday morning, after hard-drive maker Western Digital Corp.
said it would acquire Hitachi Global Storage Technologies in a deal
valued at $4.3 billion.
Shares of Western Digital (WDC) jumped more than 15% in early
trade. The company will pay $3.5 billion in cash and $750 million
in stock for the hard-drive business of Hitachi Ltd. (HIT) Hitachi
will retain a 10% stake in the combined business and have two
directors added to Western Digital's board when the deal
closes.
Seagate Technology (STX) -- Western Digital's main rival in the
drive space -- saw its shares climb more than 11%. In an early note
to clients, Keith Bachman of BMO Capital Markets wrote that Seagate
would likely benefit from "share leakage" in picking up some of
Hitachi's business.
The Nasdaq Composite Index (RIXF) rose 0.2% to 2,790.5, while
the Morgan Stanley High-Tech Index (MSH) added 0.3%.
Among large-cap techs, shares of Hewlett-Packard Co. (HPQ) , IBM
(IBM), Microsoft Corp. (MSFT) and Texas Instruments Inc. (TXN)
opened in positive territory, while Apple Inc. (AAPL), Dell Inc.
(DELL) and Intel Corp. (INTC) all declined.
Shares of Ciena Corp. (CIEND) fell almost 5% in early trade. The
maker of telecommunications equipment reported first-quarter
results and issued a lower-than-expected forecast for the current
period.