By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Microsoft Corp. jumped Friday on
news that CEO Steve Ballmer is planning to retire, which gave a
boost to the tech sector despite post-earnings selloffs on stocks
like Pandora Media and Marvell Technology.
Microsoft (MSFT) was up 7.3% closing at $34.75, as the software
giant announced that Ballmer will be stepping down within the next
12 months. The stock was the top gainer on the Dow Jones Industrial
Average.
"Beyond this, we expect sum of the parts and capital-return
scenarios to drive the stock," wrote Walter Pritchard of Citigroup,
maintaining a $35 price target on the shares.
The Nasdaq Composite Index (RIXF) rose 0.5% to close at 3,656.
The benchmark ended the week up 1.5%.
The Philadelphia Semiconductor Index (SOX) was flat, while the
Morgan Stanley High Tech 35 Index (MSH) rose 0.5%.
Shares of Facebook Inc. (FB) jumped 5.2% to close at $40.55,
topping $40 on J.P. Morgan note that cited "solid trends in overall
engagement" among both mobile and desktop users.
In a note, J.P. Morgan analyst Doug Anmuth, citing new data from
comScore, said, "We continue to believe that Facebook's strong
mobile usage is offsetting desktop declines and that competing
services are having only a modest impact on Facebook."
J.P. Morgan has an overweight rating on Facebook with a price
target of $44.
Facebook shares have jumped more than 50% year-to-date, after
struggling for months to climb past its initial public offering
price of $38.
Another sharp gainer in the software sector was Autodesk Inc.
(ADSK), which jumped 7.7% to close at $38.91, a day after the
design-software company reported results.
On the other hand, shares of Pandora Media Inc. (P) fell 12.9%
to close at $18.91 after the Internet-radio company posted a
disappointing outlook. Stifel Nicolaus and Raymond James downgraded
the stock to neutral ratings.
"While Pandora delivered a strong 2Q driven by increasing mobile
monetization (mobile revs up 92% year-over-year) and lower content
costs, we believe the risk reward on shares is now more balanced
with shares up [about] 130% year-to-date and trading above our
previous $20 price target," Aaron Kessler of Raymond James wrote to
clients.
Marvell Technology (MRVL) shares fell 5.9% to close at $12.19.
The chip maker reported better-than-expected results for the second
fiscal quarter late Thursday, though earnings still fell about 34%.
Pacific Crest analyst Michael McConnell wrote that the company's
margin guidance could be seen as disappointing to some.
"We are cautious on sustainability of Marvell's mobile traction,
which may have been driven more by price than technology," he
wrote.
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