By Benjamin Pimentel
The tech sector sank into the red Monday, as shares of
Amazon.com, Dell Inc. and SanDisk Corp. retreated.
However, the chip sector held on to gains as the Philadelphia
Semiconductor Index (SOX) rose 1.4%.
Investor interest in Advanced Micro Devices and Intel Corp
heightened as the two chip behemoths geared up for their quarterly
reports and a new wave of optimism about a strengthening
semiconductor market.
AMD (AMD) was up 5% as UBS upgraded the chip maker's rating to
buy from neutral, citing improving PC demand and other factors.
Analyst Uche Orji said the upgrade was based partly on "improved
near term expected growth as our recent checks show that a PC
market tailwind is lifting both Intel and AMD."
Intel (INTC), which reports quarterly results on Tuesday, was up
about 1%. AMD is scheduled to report on Thursday.
Bank of America/Merrill Lynch analyst Sumit Dhanda urged
investors to "think big" in anticipation of upbeat results from
Intel, the world's biggest semiconductor company.
"Sales are poised to exceed expectations," Dhanda said in a
note, adding that investors should "expect outlook well ahead of
consensus."
Meanwhile, Google Inc. (GOOG) gained more than 1% as three
brokers raised their price estimates for the Internet giant.
"Discussions with advertising agencies, including a dinner we
hosted with senior agency executives, point to rising spending on
Google since June, led by travel, clothing and home improvement
advertisers," Goldman Sachs analyst James Mitchell said in a
note.
But these gains failed to keep the Nasdaq Composite Index (RIXF)
afloat, as the tech-heavy benchmark lost 0.2% to 2,136 with less
than an hour left in the session. The Morgan Stanley High Tech 35
Index (MSH) also was down 0.1%.
Leading the decline was SanDisk Corp. (SNDK), which fell more
than 2% as UBS downgraded the chip maker's rating to sell from
neutral, citing pricing pressures and "a seasonal demand peak in
October/November that could limit further average selling price
increases."
Also in the red were Dell Inc. and Amazon.com, shares of which
were each down more than 2%.