By Rex Crum
The overall tech sector was in the red in afternoon trading
Thursday, but McAfee Inc. surged by as much as 58%, as Intel
Corp.'s surprise $7.7 billion deal to acquire the security-software
company highlighted the sector's action.
Intel (INTC) shares fell more than 3%, to $18.92 after the
world's No. 1 semiconductor company said it would pay $48 a share
for McAfee (MFE) -- a 60% premium over McAfee's Wednesday closing
price -- to acquire a company that Intel said 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 46 cents a share, or 3.6%, to $13.05.
Other chip stocks fell along with Intel, as Advanced Micro
Devices Inc. (AMD) was down 3.5% to $6.34 a share and Micron
Technology Inc. (MU) gave up more than 4% to fall to $7.15.
Brocade Communications Systems (BRCD) shares fell 28 cents, or
more than 5%, to $4.85. 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) and
Yahoo Inc. (YHOO).
The Nasdaq Composite Index (RIXF) fell more than 43 points, or
2%, to 2,172. 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 95 cents a share, or 2.3%, to
$40.39 and Dell Inc. (DELL) was off by 13 cents a share to trade at
$12.06. Both computer giants report quarterly results after the
market close.
Google Inc. (GOOG) fell $12.19 a share to $470 on the sixth
anniversary of the Internet search leader holding its IPO. When
Google went public, it priced its stock at $85 a share in an
initial offering of $1.67 billion.