By Benjamin Pimentel, MarketWatch
SAN FRANCSICO (MarketWatch) -- Shares of Intel Corp. and
International Business Machines Corp. slipped Wednesday, leading a
tech sector retreat and weighing down the Dow Jones Industrial
Average after the two giants' reports disappointed Wall Street.
Intel (INTC) slid 1.8% to close at $27.95 after the world's
biggest chipmaker beat Wall Street estimates, but its gross margin
forecast for the current quarter was a tad lower than expected.
"The company beat numbers by a bit in the first quarter, and
raised revenue estimates for the second quarter," Bernstein
Research analyst Stacy Rasgon said in a note. "However, we get the
feeling that the investment community might have anticipated a
larger raise than was offered."
IBM (IBM) shares shed 3.5% to close at $200.13 after the company
reported flat sales.
In a note, Sterne Agee's Shaw Wu wrote, "IBM's global and
diverse business model continues to allow it to deliver strong
results despite a tougher macroeconomic environment."
But he also cited tough year-over-year comparisons especially in
Big Blue's hardware business, and the company's high exposure in
the financial services market.
Apple Inc. (AAPL) shares slipped a fraction to close at
$608.34.
On the other hand, Yahoo (YHOO) shares gained 3.2% to close at
$15.49 as investors welcomed a glimmers of hope from the struggling
Web portal, as the company beat Wall Street's earnings
projections.
Also giving the sector a lift were shares of Seagate Technology
(STX) which added 3.8% to close at $28.96 after the hard disk drive
maker posted a surge in profit.
In a sign of recovery for the hard disk drive industry, which
was hurt by the impact of the Thailand flooding disaster, rival
Western Digital (WDC) also saw its shares rise 5.2% to close at
$41.56.
But these gains were not enough to keep the tech sector afloat,
as the Nasdaq Composite Index (RIXF) gave up 11 points, or 0.4%, to
close at 3,031.
The Morgan Stanley High Tech 35 Index (SOX) and the Philadelphia
Semiconductor Index (SOX) were each down a fraction.