By Rex Crum and Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- The technology sector saw a
massive selloff on Monday that was sparked by a broad market slump
and exacerbated by large declines at firms like Apple Inc.,
Facebook and Yahoo.
The Nasdaq Composite Index (RIXF) fell 1.8% to 3,296 while the
Morgan Stanley High-Tech Index (MSH) fell 2.2% and the Philadelphia
Semiconductor Index (SOX) gave up 2.6%. The Dow shed more than 240
points by midday, as investors registered fears about a possible
liquidity crunch in China.
Apple (AAPL) was the most notable decliner in techs, as the
shares fell more than 3.3% to $399.80 by midday -- putting the
stock below the $400 mark for the first time in two months.
Before the start of trading, Jefferies & Co. analyst Peter
Misek cut his price target on Apple's stock to $405 a share from
$420. In a research note, Misek also lowered his iPhone sales
estimate for the third quarter of the year to 27 million units from
30 million.
"We remain cautious on Apple as it fills in its product gap"
with what Misek estimates will be a 5-inch screen iPhone 6 next
year. Misek also said that checks in the smartphone industry
indicate longer inventory levels for mobile-network carriers,
suggesting that products are sitting on the shelves longer than
anticipated.
Microsoft (MSFT) was one of the few gainers, edging upwards by
0.5% to $33.44. The software giant will kick off its Build
developers conference in San Francisco on Wednesday, where it is
expected to preview its upcoming Windows Blue update.
Nearly every other major tech stock also lost ground by midday.
Google Inc. (GOOG) was down 1.7%, at $865.62, even though J.P.
Morgan analyst Doug Anmuth raised his price target on the company's
stock to $1,025 a share from $860 on overall positive sentiment for
the company's business efforts.
Dell (DELL) shares were down a fraction to $13.31. The PC maker
argued in a filing on Monday morning that a counter-proposal led by
activist Carl Icahn "lacked credibility" and is risky.
Yahoo (YHOO) was down 4.8% to $23.98. The company will hold its
annual shareholder meeting on Tuesday morning. Facebook (FB) fell
nearly 4% by midday.
Among major decliners by midday included Amazon.com (AMZN) ,
down 2.3%; Intel (INTC) , down 2.7%; EMC Corp. (EMC) , down 2.9%;
and Hewlett-Packard Co. (HPQ) , down 3.6%.
One bright spot was Stec Inc.(STEC), which saw its shares almost
double, to $6.70, after hard disk-drive maker Western Digital Corp.
(WDC) said it would acquire the maker of solid state drives for
$340 million, or the equivalent of $6.85 a share.
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