By Rex Crum
Declines in Google Inc. and Advanced Micro Devices Inc. shares
contributed to early losses for the tech sector Friday.
Google (GOOG) fell almost $31 a share, or more than 5%, to
$564.25, largely in reaction to the company's plans to spend more
aggressively on growing its business.
Google reported a first-quarter profit of $1.96 billion, or
$6.06 a share, up from $1.42 billion, or $4.49 a share, in the same
period a year ago. Net revenue, which is sales minus Google's
revenue-sharing payments to partners, rose 23% to $5.06
billion.
But Google's total costs and expenses rose to $4.3 billion, from
$3.6 billion a year ago, as the company hired almost 800 new
employees, the most in a quarter in two years, and said it has no
plans to slow down spending in order to maintain its lead in the
search market and expand into new business areas.
James Mitchell, an analyst with Goldman Sachs, said the decline
in Google's stock was due to "too-much-information syndrome, with
investors seizing on any debatably-negative data points."
Mitchell, who has a buy rating on Google's stock, raised his
price target on Google to $680 a share from $670.
AMD (AMD) was also bruised, falling 66 cents a share, or 6.5%,
to $9.49.
Despite AMD turning in a first-quarter profit of $257 million,
or 35 cents a share, on $1.57 billion, AMD shares tumbled as some
analysts said more was expected from the semiconductor company.
Some concerns were also raised about how well AMD is doing in the
markets for low-end notebook PCs and corporate servers.
Nearly every other major semiconductor stock followed AMD into
the red, with losses in Intel Corp. (INTC), Micron Technology Inc.
(MU), Texas Instruments Inc. (TXN), Broadcom Corp. (BRCM) and
Nvidia Corp. (NVDA) shares.
The Nasdaq Composite Index (RIXF) fell 8 points to 2,507, while
the Philadelphia Semiconductor Index (SOX) gave up almost 1%. The
tech sector fell 0.2% on the S&P 500 (SPX).
Some advancers managed to emerge as trading progressed Oracle
Corp. (ORCL) rose 10 cents a share, to $26.30.
Before the market opened, Oracle said it would acquire Phase
Forward Inc. (PFWD), a maker of drug data-management software, for
$685 million. The deal values Phase Forward at $17 a share, or a
30% premium over its Thursday closing price of $13.08 a share.
Gains also came from Dell Inc. (DELL), Apple Inc. (AAPL),
Hewlett-Packard Co.(HPQ) and Cisco Systems Inc. (CSCO).