By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Notable losses from Apple Inc.
and Facebook Inc. weighed on the rest of the tech sector at the
close of trading Tuesday, but Dell Inc. managed to put in another
day of strong gains on speculation it might be about to go
private.
The Nasdaq Composite Index (RIXF) trimmed its losses to close at
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(DJI)
and S&P 500 (SPX) both managed to close in positive
territory.
Facebook (FB) shares ended the day with a loss of 2.7%, to close
at $30.10, after the social network unveiled its new "graph search"
function at an event at its Silicon Valley headquarters.
Search engine giant Google (GOOG) was up fractionally, closing
at $724.93, 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 6% to $20.61.
Apple (AAPL) ended the day down by more than 3%, at $485.92 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
7%, to close at $13.17 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
Silver Lake 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 still fell more than 3%, to close at $14.48 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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