By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Big drops on shares of Apple Inc.
and Facebook Inc. weighed down the rest of the tech sector late
Tuesday afternoon, though Dell Inc. managed to gain more ground on
deal speculation.
The Nasdaq Composite Index (RIXF) slipped by 0.3% to 3,110. The
Philadelphia Semiconductor Index (SOX) fell by 0.5% and the Morgan
Stanley High Tech 35 Index (MSH) fell 0.3%. The Dow and S&P 500
were both positive in the last hour of trading.
Facebook (FB) fell 2.7% to $30.11 after the social network
unveiled the "graph search" function at an event at its Silicon
Valley headquarters.
Search engine giant Google (GOOG) was up fractionally, but
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 7% to $20.27.
Apple (AAPL) was last down 3%, to $487 a share. 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."
Dell Inc. (DELL) continued to flex its muscles, rising more than
6% to $13.05 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."
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 2.9% 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."
Other declines included Hewlett-Packard Co. (HPQ), Nvidia Corp.
(NVDA) and software giant SAP (SAP) .
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