By Rex Crum Technology stocks showed signs of life in afternoon trading Tuesday, but the overall sector remained muted as the Federal Reserve began a two-day meeting on the U.S. economy. Among leading tech stocks, losses came from Apple Inc. (AAPL), Hewlett-Packard Co. (HPQ) and Microsoft Corp. (MSFT). The tech-heavy Nasdaq Composite Index (RIXF) managed to eke out a gain of 2 points to 2,050, while the Morgan Stanley High Tech 35 Index (MSH) also edged higher. The Philadelphia Semiconductor Index (SOX) remained in the red. The tech-sector losses came as the Federal Open Market Committee was set to begin a two-day meeting. The Fed is expected to make a decision on interest rates Wednesday afternoon. Cisco Systems Inc. (CSCO), EMC Corp. (EMC) and VMware Inc. (VMW) all saw shares retreat after the three companies announced a new partnership to spur the use of cloud-computing and virtualization technologies. Memory-chip makers Micron Technology Inc. (MU) and SanDisk Corp. (SNDK) were bruised a bit after Wedbush analyst Betsy Van Hees cut her rating on the stocks. Hees lowered her view of Micron to neutral from outperform and cut her rating on SanDisk to underperform from neutral, saying memory supply looks likely to exceed demand in the first quarter of 2010. Micron shares came back from an early drop of 3% to rise 2 cents to $6.59, while SanDisk gave up 2.6% to fall to $20.31. While most tech stocks were down, media technology company Sonic Solutions Inc. (SNIC) surged more than 17% to $6.15. Before the market opened, Sonic said it reached a deal with Best Buy Co. Inc. (BBY) to provide on-demand digital content technology to a new Best Buy online service. Best Buy also received a warrant to purchase shares of Sonic's common stock.
