Tech Stocks Tick Down, Slightly

Tech Stocks got the second quarter off to middling start Monday, but some merger and M&A news helped awaken the larger markets and ease the friction from the previous session Friday.

Shares of Apple moved on news that it would ease up on DRM restrictions, and chips stocks ticked down on lower sales stats.

Apple  rose by about 6 cents in regular trading today after the computer maker and music publisher EMI announced that Apple would make its digital music catalog available to online retailers without digital rights management (DRM) restrictions. Apple, the first retailer to sign up, said it will begin selling EMI’s catalog DRM-free from the iTunes Store in May.

Private equity firm Kohlberg Kravis Roberts helped shake markets into some action after it announced a $27 billion deal to acquire payments processing giant First Data. Shares of First Data closed up by 20 percent, or $5.55 to $32.45 after the KKR bigwigs announced the deal, which was close to a 20 percent premium on First Data’s closing price from Friday.

Xerox waded into the markets with news that it would acquire Global Imaging Systems for $29 per share in cash, a deal valued at about $1.5 billion. Global Imaging gained $9.14 during the regular trading day, to close at $28.64. Xerox gained 19 cents, or just over 1 percent to close at $16.89.

Chips stocks were middling to lower throughout the regular trading day after the Semiconductor Industry Association reported two straight down months in chips sales so far this year.

The SIA said worldwide sales of semiconductors of $20.09 billion in February were 6.5 percent lower than January when sales were $21.48 billion. February sales, meanwhile, increased by 4.2 percent from the $19.28 billion recorded in February 2006. Price wars were seen as one of the factors.

Shares of AMD closed down by just over 1 percent to $12.83, but had ticked up by 2 cents in after hours trading. Transmeta shares lost 11 cents, or about 19 percent to close at 46 cents after it announced more layoffs, this time about 15 to 20 more staff to be let go.

Stocks appeared to be on the mend after Friday’s volatile close to the first quarter, even though the Nasdaq index closed down by about .03 to 2,422.62.

The Dow Jones Industrial Average closed up by .23 points to 12,382.3027.95. The S&P 500 gained 26 points to finish up at 1,424.553.69.

There was something missing in the markets Monday — maybe it was simply the start of baseball season that added a hint of distraction, and the final four, to help mark the end of March madness.

Paul Shread is on vacation this week. Technical analysis will return next week.