By Rex Crum
Technology stocks lost more ground Thursday as a harsh view of
the semiconductor market and pessimism about the economic recovery
contributed to broad losses across the sector.
The tech-heavy Nasdaq Composite Index (RIXF) fell more than 1.6%
to 2,157 by the closing bell. The Philadelphia Semiconductor Index
(SOX) gave more than 3% and the Morgan Stanley High Tech 35 Index
(MSH) was off by more than 1.5%.
At Merrill Lynch, analyst Sumit Dhanda cut his ratings on Intel
Corp. (INTC), Texas Instruments Inc. (TXN), Marvell Technology
Group Ltd. (MRVL) and LSI Corp. (LSI) to neutral from buy, and also
lowered his ratings on Maxim Integrated Products Inc. (MXIM),
National Semiconductor Corp. (NSM), Power Integrations Inc. (POWI)
and Microchip Technology Inc. (MCHP) to underperform from
neutral.
Dhanda said he made the moves because of "unfavorable
indications from our cyclical framework" that suggest semiconductor
inventory levels may be about to exceed the market's demand.
Among the stocks that Dhanda downgraded, Intel shares closed
down 4% at $19.30 while TI's shares gave up more than 3% to close
at $24.88.
Dell Inc. (DELL) shares fell 1.2% to $15.87 ahead of the PC
giant's quarterly results.
Declines also came from Apple Inc. (AAPL), Microsoft Corp.
(MSFT), EMC Corp. (EMC), Hewlett-Packard Co. (HPQ), IBM Corp. (IBM)
and Cisco Systems Inc. (CSCO).
One of the few advancers was NetApp Inc. (NTAP), whose shares
climbed 4%, to $30.83 after the company reported strong quarterly
results late Wednesday.
NetApp said that for its second quarter, it earned $96 million,
or 27 cents a share on $910 million in revenue. Excluding one-time
items, NetApp said it would have earned $130 million, or 37 cents a
share. Analysts surveyed by Thomson Reuters had forecast NetApp to
earn 30 cents a share on $881.6 million in revenue.