By Benjamin Pimentel
The tech sector plunged into the deep red Friday as spooked investors joined in a broad-based sell-off that saw shares of McAfee, Advanced Micro Devices and Palm Inc. bleeding heavy losses.
The Nasdaq Composite Index (RIXF) was down 2.2% at 2,052 in afternoon trades, strangled by declines in shares of major players. The tech-heavy benchmark was poised to close the week down nearly 5%.
The sector got caught in a broader market spiral that saw the Dow Jones Industrial Average (DJI) fall by more than 200 points. The Dow was off 220 points at last check.
Major tech companies were in negative territory, including Apple Inc. (AAPL), Hewlett-Packard (HPQ), Dell Inc. (DELL) and Google Inc. (GOOG).
Leading the decline was Palm Inc. (PALM) shares of which plunged more than 10%. AMD (AMD) also tumbled more than 6%.
Shares of McAfee (MFE) lost more than 6% after the company reported a 25% drop in profit.
"We think the street will view these results as disappointing," Deutsche Bank analyst Todd Raker wrote in a note. "It appears the macro has muted some of this momentum near-term, but remain encouraged that results will improve as the PC market and IT spending rebound."
Barclays Capital analyst Ben Reitzes affirmed the upbeat view of the PC space in a Friday note, saying, "checks ... still indicate rather healthy consumer PC unit demand trends in the back half of 2009."
But tech investors were taking a breather as the week drew to a close, and most major tech issues retreated. The Morgan Stanley High Tech 35 Index (MSH) fell 2.4%, while the Philadelphia Semiconductor Index (SOX) was off 3.4%.
A bright spot came from BMC Software Inc. (BMC) shares of which gained more than 2% a day after the company posted a higher quarterly profit.
Meanwhile, shares of RealNetworks Inc. (RNWK) fell more than 5%, after posting gains earlier in the session. Late Thursday, the digital media company swung to a third-quarter profit.
Shares of KLA-Tencor Corp. (KLAC) lost more than 4%. On Thursday, the semiconductor capital equipment company reported a higher quarterly profit.
Shares of chipmaker Maxim Integrated Products Inc. (MXIM) also sank more than 4% after the company reported lower quarterly profit.
Meanwhile, shares of Cisco Systems (CSCO) also were down more than 2%. Bloomberg News had reported that the tech giant was considering dropping its bid for Tandberg of Norway due to the opposition of some investors.
The company declined to comment, saying in a prepared statement, "We are aware of recent speculation in the market and as we are currently in the middle of a tender offer process, we are not able to comment."