By Rex Crum
Losses hit much of the tech sector Tuesday as negativity about
the debt crisis in southern Europe led to broad selling and
outweighed some positive elements in earnings from Texas
Instruments Inc. and Lexmark International Group Inc.
At the heart of the market's decline was Standard & Poor's
cutting its rating on Greece to junk status. Also adding to the
losses were concerns about the U.S. housing market and the
testimony of Goldman Sachs Group Inc. (GS) executives on Capitol
Hill.
Nearly every major tech stock was in the red. IBM (IBM) shares
gave up 89 cents to slip to $129.88 even after the company said its
board of directors approved hiking IBM's quarterly dividend by 18%
to 65 cents a share and buying back $8 billion in shares.
With the new stock buyback plan, IBM will have about $10 billion
at its disposal to repurchase stock.
TI (TXN) gave up 39 cents a share, or 1.4%, to fall to $26.78
even though the communications chipmaker posted upbeat earnings
results late Monday.
TI said that for its fiscal first quarter it earned $658
million, or 52 cents a share, up from earnings of $17 million, or a
penny a share, in same period a year ago. Revenue climbed to $3.2
billion from $2.09 billion. The results topped the estimates of
analysts surveyed by FactSet Research, who forecast TI to earn 51
cents a share on $3.13 billion in sales.
The company said that sales of its analog chips highlighted the
quarter's results, and TI also gave a second-quarter forecast that
exceeded analysts' estimates.
Other decliners following TI south included Apple Inc. (AAPL),
Cisco Systems Inc. (CSCO), Hewlett-Packard Co. (HPQ), Oracle Corp.
(ORCL) and Dell Inc. (DELL).
Research In Motion Ltd.'s (RIMM) U.S. shares gave up 48 cents to
fall to $72.25. Late Monday, the company showed off a upcoming
version of a new operating system for its BlackBerry smartphones to
a group of industry analysts.
The Nasdaq Composite Index (RIXF) fell 35 points to 2,488, while
the Philadelphia Semiconductor Index (SOX) gave up 2.4% and the
Morgan Stanley High Tech 35 Index (MSH) shed 1.7%.
Lexmark (LXK) proved to be one of the few notable advancers,
rising $1.35 a share, or 3.4%, to $41.32 following the printing and
imaging company's first-quarter earnings report.
Before the market opened, Lexmark said it earned $95.3 million,
or $1.20 a share, on $1.04 billion in sales for the quarter, up
from earnings of $59.2 million, or 75 cents a share, on revenue of
$944 million in the same period a year ago.
Excluding one-time items, Lexmark would have earned $1.35 to
outstrip analysts' forecasts of a profit of 89 cents a share on
$961.1 million in revenue.
Telecom-equipment company Tellabs Inc. (TLAB) climbed 62 cents a
share, or more than 7%, to $8.85 after the company reported
stronger-than-expected first-quarter results.