Tech stocks slump in broad sector retreat
SAN FRANCISCO (MarketWatch) -- Technology stocks were bruised Thursday, with memory-chip maker
Leading the losses were more fears about the economic situation in Europe and data that lent credence to the Federal Reserve's concerns about the shaky state of the U.S. economy. Read more about the issues affecting the U.S. stock market on Thursday.
The performance of Micron and Red Hat underscores recent concerns over pricing in the memory-chip market, as well as the health of corporate information-technology spending.
Micron (MU) shares fell 48 cents, or almost 8%, to close at $5.65 after the chip maker reported a loss, taking a hit from weak pricing for memory chips.
Wedbush analyst Betsy Van Hees wrote that "in the near term, we think the stock will likely be rangebound until there is better visibility" on a number of factors.
She cited supply-and-demand trends for NAND chips in the second half of the year, and the potential impact of the expected release of Ultrabook notebooks based on
However, she also maintained an outperform rating, citing Micron's comments on a stronger second half of the year.
ThinkEquity's Suji De Silva also kept a buy rating on Micron, saying in a note: "We believe [Micron] is experiencing firming demand across DRAM, where supply is tightening due to competitor financial issues, and broader end-market demand is stabilizing."
Separately, Red Hat (RHT) shares gave up $3.50, or more than 6%, to end the day at $53 after the software maker reported a weaker-than-expected outlook.
Reacting to Red Hat's report, J.P. Morgan John DiFucci wrote: "We continue to remain cautious on global IT spending, especially in the coming months. That said, we believe the company continues to execute well against a weakening macro environment." Read more about Red Hat's results.
The blue-chip index fell 251 points, or almost 2%, to close at 12,573 as investors reacted to economic data, including the June Philadelphia Fed index which came in below consensus. The Nasdaq Composite Index (COMP) gave up 71 points, or 2.4%, to close at 2,859, and the Philadelphia Semiconductor Index (SOX) was off by 4%.
Declines also came from
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