By Benjamin Pimentel
The tech sector slipped a tad on Monday, as shares of
Amazon.com, Dell Inc. and SanDisk Corp. fell, offsetting gains by
chip companies and Google Inc.
However, the chip sector held on to gains the Philadelphia
Semiconductor Index (SOX) rose 1.4%, even as the Nasdaq Composite
Index (RIXF) dipped by .01% to 2,139. Meanwhile, the Morgan Stanley
High Tech 35 Index (MSH) managed to eke 0.1% gain.
The session was defined by heightened investor interest in
Advanced Micro Devices and Intel Corp. as the two chip behemoths
geared up for their quarterly reports and a new wave of optimism
about a strengthening semiconductor market.
AMD (AMD) gained 4.4% as UBS upgraded the chip maker's rating to
buy from neutral, citing improving PC demand and other factors.
Analyst Uche Orji said the upgrade was based partly on "improved
near term expected growth as our recent checks show that a PC
market tailwind is lifting both Intel and AMD."
Intel (INTC), which reports quarterly results on Tuesday, was up
1.1%. AMD is scheduled to report on Thursday.
Bank of America/Merrill Lynch analyst Sumit Dhanda urged
investors to "think big" in anticipation of upbeat results from
Intel, the world's biggest semiconductor company.
"Sales are poised to exceed expectations," Dhanda said in a
note, adding that investors should "expect outlook well ahead of
consensus."
Meanwhile, Google Inc. (GOOG) gained 1.5% as three brokers
raised their price estimates for the Internet giant.
"Discussions with advertising agencies, including a dinner we
hosted with senior agency executives, point to rising spending on
Google since June, led by travel, clothing and home improvement
advertisers," Goldman Sachs analyst James Mitchell said in a
note.
But these gains failed to keep the sector afloat.
Leading the decline was SanDisk Corp. (SNDK), which fell about
2% as UBS downgraded the chip maker's rating to sell from neutral,
citing pricing pressures and "a seasonal demand peak in
October/November that could limit further average selling price
increases."
Also in the red were Dell Inc. (DELL) and Amazon.com (AMZN),
shares of which were each down more than 2%.