By Benjamin Pimentel, MarketWatch

SAN FRANCISCO (MarketWatch) -- Shares of BlackBerry Inc. rallied, then slipped into the red Friday after the beleaguered company reported a loss that was narrower than expected, but the mobile tech firm's sales were below expectations.

BlackBerry (RIMM) early Friday reported an adjusted loss of 8 cents a share, compared to a consensus estimate of 56 cents a share, according to data from FactSet. However, BlackBerry reported revenue of $976 million, below Wall Street's projection for sales of $1.11 billion.

BlackBerry jumped early Friday after the company reported. But the stock turned negative, and was last trading down nearly 2% to $8.90.

"Short interest had ticked up in front of the print so it's reasonable that covering was part of the buying," BGC Partners analyst Colin Gillis told MarketWatch.

About 22% of BlackBerry's share float was in the hands of short-sellers, up sharply from the beginning of February, according to data from FactSet.

While BlackBerry beat expectations on its adjusted loss, the company's revenue was "disastrous," underscoring the company's challenges in a shifting market, Gillis added.

But the tech sector managed to stay in the green. The Nasdaq Composite Index (RIXF) gained nearly 1% to 4,182. The benchmark was still on track to end the week in the red.

The Morgan Stanley High Tech 35 Index (MSH) was up 1.2%, while the Philadelphia Semiconductor Index (SOX) shed 1%.

Among the top gainers was 2U Inc. (TWOU), which recovered from a wobbly start and was last trading up 7% as the cloud-based education platform company began trading on the Nasdaq Global Market. 2U priced its initial public offering at $13, the high end of its range of $11 to $13.

On the other hand, shares of Aerohive Networks (HIVE), a wireless networking firm, dropped more than 6% to $9.30 in its trading debut. The company priced its IPO at $10, the midpoint of its range of $9 to $11.

Still, the tech sector got a lift from major tech issues. Hewlett-Packard (HPQ) was up 1%, while Google (GOOG) gained 1.3% and Cisco Systems (CSCO) added 2%.

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