Downgrades Weigh on Tech Sector
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A number of downgrades weighed on the Nasdaq on Tuesday, as slowdown fears held the tech sector back even as blue chip shares managed modest gains.
Marvell (NASDAQ: MRVL) lost 6.6% in heavy volume after Jefferies & Co. downgraded the stock on concern about slowing growth and the possible loss of a Research In Motion (NASDAQ: RIMM) contract to Freescale Semiconductor.
Broadcom (NASDAQ: BRCM) fell 4.7% after an Oppenheimer & Co. analyst said the company's growth rate could begin to decelerate late this year. Integrated Devices (NASDAQ: IDTI) was also hit by an Oppenheimer downgrade.
And Nortel (NYSE: NT) shed 6.4% after Lehman Brothers lowered estimates on the telecom equipment maker.
Those downgrades came on a day that the Federal Reserve said that economic growth is likely to be weak for the rest of the year and will recover only modestly in 2009. But blue chip stocks rose nonetheless on a mixed housing report, led by gains in shares of Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM), as stocks stabilized following Monday's steep losses.
Alcatel-Lucent (NYSE: ALU) was up 5% on a Reuters report that former COO Mike Quigley could return as CEO.
Dell (NASDAQ: DELL) edged higher ahead of its earnings report due out late Thursday.
The Nasdaq slipped 3 to 2362, the S&P rose 4 to 1271, and the Dow rose 26 to 11,412. Volume rose to 3.63 billion shares on the NYSE, and 1.52 billion on the Nasdaq. Advancers led by a 21-12 margin on the NYSE, and 15-12 on the Nasdaq. Upside volume was 65% on the NYSE, and 42% on the Nasdaq. New highs-new lows were 17-112 on the NYSE, and 37-108 on the Nasdaq.