By Rex Crum
SAN FRANCISCO (MarketWatch) -- Tech stocks showed some signs of
life Tuesday, with gains from Yahoo Inc. and Priceline.com Inc. as
well as some drama in the Web-content-delivery arena highlighting
the action on a mixed day for the overall sector.
Yahoo (YHOO) rose 53 cents, or more than 3%, to $16.97 following
reports that a group of private-equity firms approached Alibaba
Group founder Jack Ma about making a bid for the Internet company.
Yahoo currently owns about 40% of Alibaba, which is the largest
e-commerce company in China.
There were also reports that AOL Inc. (AOL) has hired Bank of
America and Allen & Co. to help it look into strategic options
that could include acquiring Yahoo.
Priceline (PCLN) shares climbed $32.07, or more than 8%, to
$420.65 following the company's better-than-expected third-quarter
results. Late Monday, Priceline said it earned $223 million, or
$4.41 a share, on revenue of $1 billion, compared with a profit of
$319 million, or $6.42 a share, on $730.7 million in sales in the
year-ago quarter.
However, excluding one-time items, Priceline would have earned
$5.33 a share to beat the estimates of $4.97 a share on $974.4
million from analysts surveyed by FactSet Research.
Among sector leaders, gains came from Microsoft Corp. (MSFT),
Dell Inc. (DELL), Qualcomm Inc. (QCOM) and EMC Corp. (EM)
Companies involved in the delivery of Web content saw some
action following reports that Akamai Technologies Inc. (AKAM) is
about to lose its business with Netflix Inc. (NFLX).
Jeff Young, an Akamai spokesman, denied the reports, calling it
"inaccurate to say all [Netflix] traffic" carried by Akamai would
be lost, noting that Netflix uses multiple vendors to carry its
video-streaming traffic.
Young said what was more troubling for Akamai were the reports
of poor performance of its technology. "That is untrue, and Netflix
is very much a customer of Akamai," he said.
Akamai shares trimmed their losses, but closed down $2.58 a
share, or almost 5%, at $51.56. Two other companies in the
content-delivery market, Limelight Networks Inc. (LLNW) and Level 3
Communications Inc. (LVLT), climbed on speculation that they were
in line to get at least some of Akamai's Netflix business.
Limelight shares rose $1.14, or more than 17%, to $7.74, while
Level 3's stock was up 17 cents a share, or 18.6%, to close at
$1.05.
The Nasdaq Composite Index (RIXF) fell 17 points to 2,562, while
the Philadelphia Semiconductor Index (SOX) gave up more than
1%.