By Rex Crum Tech stocks rallied Friday as most of the sector ended the week on an upbeat note, save for Dell Inc., which failed to join the advance due to negative reaction to portions of the PC giant's earnings report. The Nasdaq Composite Index (RIXF) climbed 25 points to 2,229, but still closed the week with a loss of 5%. The Philadelphia Semiconductor Index (SOX) rose 2.5%. The Morgan Stanley High Tech 35 Index (MSH) was up 1.4%. Dell (DELL) shed 97 cents, or almost 7%, to close at $13.35 a share after the company's late-Thursday earnings report. Dell reported a 52% rise in its first-quarter earnings, led by strong demand for PCs and servers. However, the quality of Dell's earnings was called into question, as the company posted gross margins of 17.6%. Shaw Wu, who covers Dell for Kaufman Bros., said expectations had been for Dell's margins to reach 18%, and that the company appears to have suffered more than Hewlett-Packard Co. (HPQ) or Apple Inc. (AAPL) at the hands of rising component costs. "The reality is Dell has a much less diverse business model and, thus, much less room to maneuver," Wu said in a research note. But while Dell declined, much of the tech sector shook off its doldrums of the past several sessions in an attempt to close the week on an upbeat note. Gains came from Apple, H-P, IBM Corp. (IBM), Adobe Systems Inc. (ADBE), Broadcom Corp. (BRCM) and Yahoo Inc. (YHOO) Marvell Technology Group Ltd. (MRVL) climbed $1.48 a share, or more than 8%, to $19.32 after the chip maker reported a strong first-quarter profit late Thursday that was led by sales of chips for mobile devices. A few other notable tech stocks joined Dell in the red, with losses coming from Microsoft Corp. (MSFT), Oracle Corp. (ORCL) and Brocade Communications Systems Inc. (BRCD). Brocade shares fell 51 cents, or 8.7%, to $5.36 after the networking-equipment company reported mixed second-quarter results late Thursday. Brocade posted earnings that beat Wall Street analysts' estimates, but sales fell short of forecasts.
