By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Intel Corp. shares were up
sharply Tuesday, leading the tech sector higher, after J.P. Morgan
lifted its rating on the chip giant based on signs of a stabilizing
PC market and more realistic expectations from Chief Executive
Brian Krzanich.
Intel (INTC) was up 4% to close at $26.51, setting the pace for
a chip sector rally. J.P. Morgan analyst upgraded the stock to
overweight from neutral.
"We believe the PC market will remain relatively stable in 2014,
and we believe Intel's new CEO will continue to provide realistic
guidance and focus on areas where Intel has an advantage -- thereby
improving margins and returns," J.P. Morgan analyst Christopher
Danely told clients in a note.
Other chip stocks posted gains, with Advanced Micro Devices
(AMD) , up 4.1% to close at $4.30 and Texas Instruments (TXN)
gaining 2.6% to close at $43.34.
The Philadelphia Semiconductor Index (SOX) was up 2.3%. The
Nasdaq Composite Index(RIXF) was ahead 1.7% to close at 4,183,
turning positive for the year.
The group also got a lift from Google Inc.(GOOG), which was up
2.4% to close at $1,149 a day after the Internet powerhouse
announced that it was acquiring Nest Labs Inc. for $3.2
billion.
While the news surprised some analysts, the acquisition also won
praise on Wall Street.
"With this acquisition, Google is placing a bet that it can
connect the more than 115 million homes in the U.S. and eventually
millions more globally. Google is also making a bet on the Internet
of Things space with a strong brand with good intellectual capital,
and a management team that is good at industrial design," Topeka
Capital's Victor Anthony told clients in a note.
Other gains came from Facebook Inc. (FB) and
Hewlett-Packard(HPQ). Apple Inc. (AAPL) climbed 2% to close at
$546.39, while Twitter Inc. (TWTR) rose 0.7% to close at
$58.21.
Shares of AOL Inc. (AOL) jumped nearly 7% to close at
$47.85.
On the downside, shares of GameStop (GME) fell 20% to close at
$36.31 after the video game retailer lowered its forecast. GameStop
said it now expects a quarterly profit of $1.85 to $1.95 a share,
down from an earlier forecast of $1.97 to $2.14 a share.
The stock has shed more than 25% since the beginning of the
year.
Other technology stories from MarketWatch:
Google raises some privacy issues with Nest buy
In Silicon Valley, $3 billion now price for start-ups
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