By Benjamin Pimentel
The tech sector made a broad advance Monday as shares of Brocade
Communications Systems Inc. soared on a published report that the
networking-gear maker could be placed up for sale.
Brocade (BRCD) traded as much as 19% higher on an intraday basis
and the shares gained by nearly 15% in afternoon dealings, rallying
after The Wall Street Journal, citing unnamed sources, reported
that the company was considering selling itself.
The Nasdaq Composite Index (RIXF) rose 0.9% to 2,066, while the
Morgan Stanley High Tech 35 Index (MSH) added 1.2% and the
Philadelphia Semiconductor Index (SOX) was up 1.8%.
The tech sector got a boost from other players, including
SanDisk Corp. (SNDK) and Research In Motion (RIMM). Shares of
SanDisk rose 4%, while RIM moved up 2.5% on the session.
Shares of Convergys Corp. (CVG) also jumped, rising more than 8%
as Citigroup upgraded the services and software company's rating to
buy.
Meanwhile, shares of Advanced Micro Devices (AMD) recovered from
earlier losses brought on when FBR Capital Markets downgraded the
chip maker to market perform from outperform, citing a "potential
PC build pull-in." AMD traded more than 2% higher at last
check.
In downgrading the company, analyst Craig Berger said that,
based on checks with contacts, "October builds will be the peak for
PCs in 2009, whereas, usually November is the peak build
month."
"While we do not want to get overly bearish ... given improving
global demand and unknown holiday sell-through trends, we feel
these actions are prudent given peaking near-term momentum, more
downstream inventory to digest [at least in China], and a
potentially overheated PC supply chain," Berger wrote.
