By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Losses from Apple Inc. stood out
in the tech sector Wednesday, with the company's shares falling
more than 5% as investors reacted to the price of the new iPhone 5C
in emerging markets such as China.
Apple (AAPL) shares fell by almost $27, to close at $467.71, and
analysts at Bank of America/Merrill Lynch, Credit Suisse and UBS
all cut their ratings on the company's stock. The main reason cited
was that the iPhone 5C, which will start at $99 in the U.S. with a
two-year service contract, will cost the equivalent of $733 in
China for an "unsubscribed" phone, meaning the phone doesn't come
with a contract from a wireless carrier.
Few mobile-phone consumers in emerging markets such as China use
their phones with service contracts, and the non-contract price of
the iPhone 5C was slammed by several analysts.
UBS analyst Steven Milunovich, who cut his rating on Apple to
neutral from buy, and lowered his price target to $520 a share from
$560, said he fears "Apple's pricing strategy will hamper the
company's ability to be competitive in key growth areas in the
smartphone market, particularly in China."
Companies that have provided chips for the iPhone and other
smartphones also retreated, with Qualcomm Inc. (QCOM) down almost
3%, to close at $68.09, and Broadcom Corp. (BRCM) off by 2.5% to
end the day at $26.10.
Take-Two Interactive Software Inc. (TTWO) shares ended the day
down by 4.6% at $17.30. Pacific Crest analyst Evan Wilson cut his
rating on Take-Two's stock to sector perform from outperform in
advance of next week's release of "Grand Theft Auto V".
Texas Instruments Inc. (TXN) shares fell by 28 cents, to $40.03.
Late Tuesday, TI narrowed its third-quarter outlook to a range of
$3.15 billion to $3.29 billion from an earlier estimate of sales
between $3.09 billion and $3.35 billion.
Losses also came from Netflix Inc. (NFLX), down by 1.5% at
$308.30, Amazon.com Inc. (AMZN), which pared back by 72 cents a
share to close at $299.64 and Yahoo Inc. (YHOO), off by 1% to end
the day at $29.19.
The Nasdaq Composite Index (RIXF) trimmed its losses, but still
gave up 4 points to end the day at 3,725, while the Philadelphia
Semiconductor Index (SOX) also closed in the red.
Despite the broad losses, some gainers managed to emerge.
IBM Corp. (IBM) shares rose 2.2%, to $190.70 after selling its
customer care outsourcing business for $505 million to Synnex Corp.
(SNX) on Tuesday. Synnex's shares rose 20% to $57.59.
Pandora Media Inc. (P) rose 5% to $21.38, eBay Inc. (EBAY) was
up by 1.5%, to close at $54.28 and Polycom Inc. (PLCM) shares
climbed almost 8% to $10.73.
Polycom got a lift after the video conferencing technology
company said its board approved a $400 million stock buyback plan
that will be funded by $150 million in cash and $250 million in
debt.
Fusion-io Inc. (FIO) shares rose 11.5%, to $14.64, on
speculation that Seagate Technology (STX) might be interested in
acquiring the flash-memory technology company.
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