By Benjamin Pimentel
An early tech rally fizzled as the sector sank into the red
Thursday on losses in shares of Electronic Arts and Advanced Micro
Devices.
After posting gains at the opening bell, the Nasdaq Composite
Index (RIXF) was down 1.3% at 2,103.
AMD (AMD) led the retreat, its shares down nearly 7%. Electronic
Arts (ERTS) also fell 3.8%. On Wednesday, Electronic Arts shares
jumped on rumors of a possible buyout by Microsoft, but the
software giant later denied the report. Microsoft was up
fractionally % Thursday morning.
The sector got a boost from shares of Red Hat Inc. (RHT) which
soared more than 11% after the software maker reported a jump in
quarterly profit and scored an upgrade from Bank of America-Merrill
Lynch. Bank of America raised its rating for the company to buy,
citing the firm's strengths during a slump in corporate spending in
information technology.
"Red Hat, as a low cost alternative, is taking wallet share of
tight IT spending," analyst Kash Rangan said in a note.
After gaining early in the session, National Semiconductor (NSM)
was down 1.6%. On Thursday, Citigroup upgraded the chip maker to
buy, saying investors were underestimating the company's
strengths.
The Morgan Stanley High Tech 35 Index (MSH) was down 1.6%, while
the Philadelphia Semiconductor Index (SOX) was behind 2.9%.
Also in the red were Google Inc. (GOOG), Apple Inc. (AAPL) and
Yahoo Inc. (YHOO).