By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Facebook Inc. claimed the
tech-sector spotlight in afternoon trading Tuesday as the world's
largest social-networking firm introduced new search capabilities
aimed at providing more information to its members.
At an event at Facebook's (FB) headquarters in Palo Alto,
Calif., Chief Executive Mark Zuckerberg and other executives
unveiled the "graph search" function. The feature allows Facebook
users to search content that has been shared by other friends on
the social network. Graph search will initially encompass people,
pictures and places and interests.
Zuckerberg said Facebook's graph search will let a user start
with "a precise query and return to you the answer, not the links
where you might get the answer."
Market reaction to Facebook's announcement was muted, as the
shares fell 2% at $30.29. Online-review and recommendation company
Yelp Inc. (YELP) was seen as suffering at the hands of Facebook's
new initiative, as its shares fell more than 6% at $20.50.
Among other tech stocks, Dell Inc. (DELL) continued to flex its
muscles, rising more than 5% to $12.91 a share on top of Monday's
13% gain. The advances came about after reports said the PC giant
is in talks with two private-equity firms about going private. The
Wall Street Journal reported that the companies in the discussions
were TPG and Silverlake Partners.
Analysts that follow Dell said a buyout of the company is
possible, but there are many hurdles to overcome if the world's
third-largest PC company goes private.
"The likelihood is low, as it would take sizable financing for a
company of Dell's size, with its $21 billion market cap," said Shaw
Wu of Sterne Agee. "A deal of this size would likely involve
multiple private-equity firms, and we estimate that the majority of
[Dell's] businesses remain under structural and secular
pressure."
Decliners still weighed on the overall tech sector, helping to
push the Nasdaq Composite Index (RIXF) down by almost 14 points to
3,103. The Philadelphia Semiconductor Index (SOX) and the Morgan
Stanley High Tech 35 Index (MSH) were also in the red.
Apple (AAPL) remained in the red, falling almost 3%, to $487.35
a share. On Monday, Apple's stock took a hit on reports that the
company has put off orders for some parts for the iPhone 5 due to
weaker-than-expected demand for the smartphone.
Nomura Equity Research analyst Stuart Jeffrey cut his December
quarter iPhone sales estimates to 48 million from 50 million, and
lowered his revenue forecast for Apple to $53 million from $54.2
million, saying that he still believes margins on the iPhone "are
unsustainably high and will fall."
Research In Motion Ltd. (RIMM) was upgraded to a buy rating from
underperform by Charter Equity on Tuesday. But shares of the
BlackBerry maker were down after jumping more than 10% in the
previous session.
In a note to clients, analyst Ed Snyder wrote that the "curb
appeal" of the new BlackBerry 10 operating system expected to
launch in the coming weeks "could help investors look past
network-pricing issues." He cited his "preliminary review" of the
new operating system, adding that with "a compelling user
interface, 70K applications and RIM's hallmark QWERTY keyboard
included in the SKU lineup, we believe the BB10 platform will
appeal to a healthy percentage of the company's 80K subscribers,
driving an upgrade cycle."
Still, RIM's shares pulled back by 3.4% to trade at $14.44.
Declines also came from Hewlett-Packard Co. (HPQ), Oracle Corp.
(ORCL) and Nvidia Corp. (NVDA)
(NVDA)
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