By Rex Crum
Technology stocks added to their gains as trading progressed
Wednesday, with several bellwether companies on the rise and
investors showing encouragement for the market as fears waned about
the health of the banking sector in Europe.
However, UBS cast a shadow on part of the business after the
brokerage cut its ratings on Hewlett-Packard Co., Intel Corp. and
several others.
Among leading tech stocks, gains came from Apple Inc. (AAPL),
Microsoft Corp. (MSFT), Cisco Systems Inc. (CSCO), Google Inc.
(GOOG), Yahoo Inc. (YHOO) and NetApp Inc. (NTAP)
The Nasdaq Composite Index (RIXF) rose almost 24 points to 2,232
and the Morgan Stanley High Tech 35 Index (MSH) was up 1%.
The market benefited from encouraging news about banks in
Europe, and from hope that the U.S. Federal Reserve will say that
economic conditions are improving.
However, the Philadelphia Semiconductor Index (SOX) was in the
red, as one of its top components, chip giant Intel (INTC), fell 30
cents, or 1.7%, to $17.81.
Intel retreated after UBS analyst Uche Orji cut his rating on
the stock to neutral from buy. In a research note, Orji wrote he
made the move due to signs that PC demand is looking weak heading
into the fourth quarter of the year.
The analyst also cut his price target on Intel's stock to $19.50
a share from $28.
Another UBS analyst, Maynard Um, cut his rating on H-P (HPQ) to
neutral from buy, and lowered his price target on the company's
stock to $44 a share from $54. Um cited the outlook for weakness in
the PC market, as well as uncertainty over H-P's search for a new
chief executive among the reasons for his downgrade.
H-P shares gave up $1.49, or 3.7%, to fall to $38.43.
On Tuesday, H-P said it was suing its former chief, Mark Hurd,
alleging that he is violating terms of his exit agreement with the
company by taking the job of co-president at Oracle Corp.
(ORCL)
In a statement, Oracle Chief Executive Larry Ellison blasted
H-P, calling its action "vindictive" and that H-P "is making it
virtually impossible for Oracle and H-P to continue to cooperate
and work together in the IT marketplace."
Imaging-device chip maker Zoran Corp. (ZRAN) fell 71 cents a
share, or almost 9%, to $7.53 after the company said it would
acquire TV set-top box maker Microtune Inc. (TUNE) for $166 million
in cash. Microtune's shares rose 49 cents, or almost 20%, to
$2.96.
LED technology companies Aixtron (AIXG) and Veeco Instruments
Inc. (VECO) were in the red after Avian Securities analyst Andy
Abrams cut his rating on both stocks to neutral from positive.
Abrams said there are reports of higher LCD inventories and weaker
consumer spending that could affect the sector.
Aixtron was down $1.40, or 5.5%, at $24.71, while Veeco gave up
$3.33 a share, or more than 9%, to fall to $33.11. Another LED
technology firm, Cree Inc. (CREE), was down $4.30, or 8%, at
$50.32.