Merrill Lynch's Joseph Osha told investors chip stocks are still too expensive, even with the recent selloff. "Our stance on the sector in the U.S. continues to be cautious," he said, with low valuations -- the price stocks trade at relative to earnings -- not offering enough of a reason to buy given the lack of visibility.
Among the big movers on the chip front, Rambus gained 52 cents, or 10%, to $ 5.57 on Nasdaq following news that Intel agreed to license Rambus's serial-link technology.
Vecco Instruments lost 40 cents to $17.65 on Nasdaq. Bear Stearns analyst Robert Maire reduced his rating to "attractive" from "buy," citing "merger math" following the semiconductor-equipment maker's plans to acquire rival FEI, announced late last week. "Though in the long run the merger makes sense, we feel in the short run there could be considerable uncertainty," he wrote.
The Philadelphia Stock Exchange Semiconductor Index, which includes both chip makers and semiconductor-equipment companies, finished the session ahead 17.98, or 4.8%, at 395.15.
Among tech bellwethers slated to report results this week, Microsoft lost 6 cents to $51.80, while eBay was off 22 cents to $60.80, both on Nasdaq.
EMC, which is set to report Thursday, closed ahead 55 cents at $9.10 on the New York Stock Exchange. The data-storage giant, under pressure from shareholder activists, named a new, independent director to its corporate board and reiterated its pledge to add another outsider by year end.
Techs on the wane Monday included Veritas Software, which dropped 25 cents to $17.30 on Nasdaq. Salomon Smith Barney analyst Clinton Vaughan downgraded the maker of storage software to "neutral" from "outperform," and said he expects shares to be under pressure until some new products "gain traction" in the marketplace.
Still, Mr. Vaughan said he expects the data-storage group to hold up well over the next few weeks. "Everything being equal (meaning that Pakistan and India don't go to war, Intel doesn't beat the tape down, bad economic data doesn't pop out somewhere, etc.), we expect storage stocks to rally through earnings," wrote Mr. Vaughan in a report Monday.
Some storage gainers included Brocade Communications, which rose $1.58, or 8.5%, to $20.08, and Qlogic, which added $3.39, or 8.6%, to $42.81, both on Nasdaq. Dow Jones wire report.. |
