By Benjamin Pimentel
Technology stocks ended up putting in a mixed trading
performance Tuesday as Starent Networks shares soared on news that
Cisco Systems Inc. would acquire the wireless infrastructure
company.
Additionally, investors awaited the quarterly earnings report
from semiconductor giant Intel Corp.
The Nasdaq Composite Index (RIXF) edged up less than 1 point to
close at 2,139. The Morgan Stanley High Tech 35 Index (MSH) also
posted a small gain, but the Philadelphia Semiconductor Index (SOX)
slipped into the red.
The big news of the morning was Cisco's (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 shares rose 11 cents to close at $23.89, while Starent,
which makes mobile infrastructure equipment, soared almost 17% to
close at $33.91.
Meanwhile, Intel Corp. (INTC), which is on deck to report
third-quarter financials after the market closes, rose 9 cents a
share to close at $20.49, even 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 gave up 6 cents to end the day at $6.08.
Meanwhile, other tech giants also declined, including Dell Inc.
(DELL), IBM Corp. (IBM), Apple Inc. (AAPL) and Hewlett-Packard Co.
(HPQ).
Other tech players closing in positive territory included eBay
Inc. (EBAY), Research In Motion Inc. (RIMM), Yahoo Inc. (YHOO) and
Amazon.com Inc. (AMZN).