Markets: News  

Yahoo shares fall; RIM rises on speculation

SAN FRANCISCO (MarketWatch) -- Yahoo Inc. shares retreated on Friday after the Internet pioneer warned investors that it might reconsider its plans to return cash from selling its lucrative Alibaba stake.

But the tech sector bounced back from a weak start, as the Nasdaq Composite (COMP) regained lost ground to eke out a fractional gain, closing at 3,021. The benchmark ended the week with a gain of 1.8%.

The Morgan Stanley High-Tech Index (MSH) and the Philadelphia Semiconductor Index (SOX) each rose a fraction.

But the sector was weighed down by Yahoo Inc. (YHOO) shares of which fell 5.4% to close at $15.15. The previous afternoon, the company warned investors through a filing with the Securities and Exchange Commission that it was considering several initiatives under new CEO Marissa Mayer, including not returning all of the cash it gets from selling its stake in Alibaba to shareholders.

The move would be controversial, as many investors had been banking on the company's previously stated plans to return that cash to shareholders. Yahoo was downgraded to neutral by Bank of America Merrill Lynch on Friday morning in response to the filing.

"We had thought a more shareholder-friendly board would ensure all cash would be returned, and think it is unlikely this new 8-K would be filed without Yahoo board's knowledge and approval," analyst Justin Post wrote, trimming his price target on the stock to $17 from $18.

Other decliners among large-cap tech stocks included Cisco Systems Inc. (CSCO) , which lost 0.9% to close at $17.54 and Juniper Networks Inc. (JNPR) which shed 0.8% to close at $19.24. Dell Inc. (DELL) edged up by 0.2% to close at $12.41.

Ubiquiti Networks Inc. (UBNT) plunged 42% to close at $8.71 after the network technology company warned that counterfeit products will hurt its forecast for the current quarter. The company predicted revenue in the range of $62 million to $70 million for the September quarter -- far below the $98.4 million expected by analysts. At least four brokers downgraded the stock following its report.

One notable gainer was Research In Motion Ltd. (RIM) (RIMM) , which saw its shares jump 6.3% to close at $8.29 following a Bloomberg report that IBM (IBM) is showing interest in the troubled company's enterprise-services unit. Previous reports have also named Samsung as an interested bidder for the company's BlackBerry business.

Broadcom Corp. (BRCM) rose 3% to close at $35.35 after the chip maker was upgraded to an outperform rating by Bernstein Research.

Shares of Fusion-io Inc. (FIO) soared 27.8% to close at $26.86, a day after the memory technology company reported better-than-expected results for its fiscal fourth quarter. The company also said it expects first-quarter revenue to "modestly increase" over its fourth-quarter sales.