By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Google Inc's $12.5 billion
acquisition of Motorola Mobility drove sharp gains across the tech
sector on Monday, with several other firms in the wireless space
getting a boost from the deal.
Before the market opened Monday, Google (GOOG) said it would pay
$40-a-share in cash to acquire Motorola Mobility Holdings Inc.
(MMI) in a bid to secure a slate of wireless patents and increase
the market position of the Android operating system. Motorola's
shares rose $13.65, or almost 56%, to close at $38.12 Monday
afternoon, while Google shares slipped by $6.54, or 1.2% to close
at $557.23.
The deal is also the largest acquisition in Google's history,
quadrupling the $3.1 billion Google paid for DoubleClick in 2007.
The acquisition comes just eight months after Motorola split into
two separate companies: Motorola Mobility, which is responsible for
smartphones and consumer products, and Motorola Solutions Inc.
(MSI), which took over the old Motorola's business and networking
product lines.
Motorola Solutions shares closed with a gain of 1.5%.
The news gave a boost to speculation around other wireless
handset makers that have their own broad patent portfolios. Nokia
Corp. (NOK) jumped more than 17%, to $6.29, while Research In
Motion (RIMM) shares rose $2.55, or 10.4%, to close at $27.11.
Nokia is developing devices for Microsoft's Windows Phone
operating system. RIM is working to launch a new slate of handsets
over the next few months as well as a new operating system next
year.
Among other tech stocks, IBM Corp. (IBM) rose $4.79 a share, or
almost 3%, to close at $172.99 after Goldman Sachs analyst Bill
Shope raised his rating on the tech giant to buy from neutral, and
lifted his price target to $195 a share from $170. Shope cited
IBM's diversified business portfolio among the reasons for his
upgrade.
Shope also cut his rating on printer company Lexmark
International Inc. (LXK) to sell from neutral, saying that the
company's supplies revenue is likely to come under industry
pressure. Lexmark's shares rose 9 cents to close at $31.78
Shope wasn't the only Goldman analyst busy cutting and raising
stock ratings on Monday.
Analyst Simona Jankowski cut Juniper Networks Inc. (JNPR),
taking down the networking equipment maker to neutral from buy, and
also lowered Brocade Communications Systems Inc. (BRCD) sell from
neutral. Additionally, Jankowski lifted F5 Networks Inc. (FFIV) to
neutral from sell.
Dell Inc. (DELL) shares rose 63 cents, or more than 4%, to close
at $15.50, a day ahead of the PC company's quarterly financial
results.
The Nasdaq Composite Index (RIXF) rose 47 point, or almost 2%,
to close at 2,555, while the Morgan Stanley High Tech 35 Index
(MSH) and the Philadelphia Semiconductor Index (SOX) both rose
about 2%.