By Benjamin Pimentel
The tech sector edged lower early Tuesday, as shares dipped
across all sectors, with investors bracing themselves for the start
of the earnings season.
The Nasdaq Composite Index (RIXF) lost 0.3% to 2,133. The Morgan
Stanley High Tech 35 Index (MSH) also was off by 0.2%, while the
Philadelphia Semiconductor Index (SOX) lost a bit more, falling by
0.3%.
The big news of the morning was Cisco Systems' (CSCO)
announcement that it was buying Starent Networks (STAR) for $2.9
billion, making it the networking gear maker's second major
purchase in three weeks.
Cisco was up 0.7%, while Starent, which makes mobile
infrastructure equipment, soared more than 17%.
Meanwhile, Intel Corp. (INTC), which is on deck to report
third-quarter financials after the market closes, was up a
fraction, as the debate on where the chip industry is headed
continued.
"We believe that increasing concerns regarding double ordering
and cancellations will trump generally better results and guidance
this earnings period," Jefferies & Company analyst Adam
Benjamin said in a note.
Bank of America analyst Sumit Dhanda offered a different take,
saying in a note, "While the inclination of late seems to be to
view any outsized beats with a dose of strong skepticism, and as a
precursor to troubles ahead (double ordering that sets the stage
for cancellations, for instance), we think concerns here are
overdone."
More data expected this week as the tech earning season kicks
off should help clarify some of these concerns. Intel's arch-rival,
Advanced Micro Devices (AMD), reports on Thursday. The chip maker's
shares were down about 1%.
Meanwhile, other tech giants also declined, including Dell Inc.
(DELL), Hewlett-Packard (HPQ) and Microsoft Corp. (MSFT).
Other tech players were in positive territory, including eBay
Inc. (EBAY) and Amazon.com (AMZN).