By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Most tech stocks followed the
broader market south as sellers ruled the day Thursday, with
Amazon.com Inc. managing to be one of the few sector leaders to
hold on to a small gain, suggesting investors approve of the online
retailer's plan to raise the price of its popular Prime
subscription by $20 a year.
Amazon ended the day with a gain of 87 cents a share to close at
$371.51 after Amazon sent a letter to its Prime subscribers, the
move to the new price of $99 a year will take effect on the
anniversary of a member's subscription. Amazon (AMZN) is offering a
promotion for new members to lock in their Prime subscriptions at
the $79 rate for the first year if they sign up within the next
seven days.
Read: Amazon gains show market likes new Prime price
For their annual fee, Prime subscribers get free, two-day
shipping on almost anything sold via Amazon and have access to more
than 150,000 movies and TV show episodes available on the company's
Prime Instant video service.
Amazon had said on its fourth-quarter earnings call in January
that it was likely to raise the price on Prime subscriptions
because of increased shipping costs.
"People think churn [subscriber turnover] will be low," said
Mark Mahaney, of RBC Capital Markets. "The $99 isn't scary, so it's
accretive."
Also read: Prime price hike could bring in $374 million a
year
Despite Amazon's gains, which were even higher earlier in the
day, nearly all of the rest of the tech sector was in the red.
Losses came from sector leaders like Apple Inc. (AAPL), Yahoo Inc.
(YHOO), Intel Corp. (INTC) and Netflix Inc. (NFLX).
Decliners included NetApp Inc. (NTAP), which gave up 3% to fall
to $36.69. Late Wednesday, the storage-technology company said it
would trim about 600 jobs, or around 5% of its workforce, and take
a charge of between $35 million and $45 million in its fiscal
fourth quarter, which ends in April.
Much of the blame for the day's losses was based upon fears
about China's economic data and the ongoing political crisis in
Ukraine.
The Nasdaq Composite Index (RIXF), which had been up early, let
the brakes go and was down closed with a loss of almost 63 points,
or 1.5%, at 4,260. The Philadelphia Semiconductor Index (SOX) also
ended the day down by 1.7%.
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