NEW YORK (CNNfn) - Chip stocks were the shining stars in an otherwise dim technology sector Tuesday.|
As tech stocks across the board turned mostly lower, chip makers headed sharply higher, led by Texas Instruments (TXN: Research, Estimates), which unveiled two new chips that it says will boost Internet-access speeds and substantially improve the battery life of wireless phones.
Texas Instruments shares advanced more than 11 percent Tuesday, ending the session 15 higher at 149.
Also heading sharply higher was Texas Instruments' rival Motorola (MOT: Research, Estimates), which added 11-15/16, or 8.2 percent to 156-7/8, after the company said it would buy privately-held networking-equipment supplier C-Port for $430 million in stock.
Motorola also entered into a partnership with database software provider Oracle (ORCL: Research, Estimates), to form a separate unit, Portal-to-Go, that will focus on wireless Internet technology. The partnership will combine Motorola's voice-recognition capabilities with Oracle software, enabling Web users to access the Internet from non-PC devices.
Oracle shares ticked up ¾ to 59-5/16, a 1.3 percent gain on the day.
PC microprocessor giant Intel (INTC: Research, Estimates) added 1-3/8 to 106-3/4, a 1.3 percent advance on the day. Meanwhile, Advanced Micro Devices (AMD: Research, Estimates), Intel's main rival in the PC processor market, ticked down 1-3/16, or 2.8 percent, to 41-13/16.
The Philadelphia Semiconductor index, or Soxx, surged 5.8 percent on the day, ticking up 53.99 to 989.93.
Computer equipment-makers lag
Meanwhile, computer-equipment stocks ended Tuesday's session mostly lower, pulling the Goldman Sachs computer hardware index down 6.38 to 529.66, a 1.2 percent decline on the day.
PC makers bucking Tuesday's downturn included Apple (AAPL: Research, Estimates), which ticked up 2-9/16 to end the session 2.3 percent higher at 113-13/16; and Gateway (GTW: Research, Estimates), which added 13/16, or 1.4 percent, to 57-5/16.
PC makers heading lower included Hewlett-Packard, which edged down ½ to 128-1/2. The company on Tuesday unveiled a new line of small-size, low-cost desktop computers aimed at corporate users.
Shares of Compaq (CPQ: Research, Estimates) slid 3/8, or 1.5 percent, to 24-7/8. Dell (DELL: Research, Estimates) lost ¼, closing at 39-13/16. IBM shares slipped 1.3 percent lower, closing down 1-1/2 at 111.
Computer networking equipment giant Cisco Systems (CSCO: Research, Estimates) fell 1-7/8, or 1.5 percent, to 123-15/16. Cisco competitor Lucent Technologies (LU: Research, Estimates) edged up ½ to 52-3/4. Meanwhile, Nortel Networks (NT: Research, Estimates) shares ended 5-1/8 lower at 113-7/8, a 4.3 percent decline on the day.
Sterling finds silver lining in buy-out
Business-to-business Web company Sterling Commerce (SE: Research, Estimates) stock soared more than 38 percent, on news that SBC Communications (SBC: Research, Estimates) is buying the company for $3.9 billion, a 40 percent premium.
Shares of Sterling, which provides software and services for B2B e-commerce, reached 43-9/16, up 12, in volume nearly double the company's average. At the same time, SBC shares slid 2 to 36-1/4, a 5.2 percent decline on the day.
SBC and Sterling will work together on "Project Pronto," a $6 billion
broadband network for providing data solutions and Internet services.
"The combination of the two companies really puts us in a unique position where we're the only company right now who can offer that end-to-end solution," Brad Sharp, Sterling's president and chief operating officer, told CNNfn Tuesday. "Right now, from a competitive perspective, that makes us the lead horse."
More details about the proposed merger are expected to be revealed at SBC's analysts' meeting in New York on Thursday and Friday.
Another B2B Web outfit that headed sharply higher Tuesday was Chemdex (CMDX: Research, Estimates). Shares of Chemdex, which focuses on the life-sciences industry, added 35-1/4, or 29.4 percent, to 155-1/4.
The company on Tuesday said that effective in March, it will change its name to Vento Corp. and will extend its reach in the B2B marketplace.
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Meanwhile, the broader Internet segment headed lower. The Dow Jones composite Internet index slipped 9.04, or 2.13 percent, to 414.79.
Internet domain-name registrar Network Solutions (NSOL: Research, Estimates) slipped 28-9/16 to 263-3/16, a 9.8 percent decline on the day. Online marketing company NetCentives (NCNT: Research, Estimates) fell 5-1/2, or 12.5 percent, to 38-1/2.
America Online (AOL: Research, Estimates) slid 1-3/4, or 3.4 percent, to 49-1/2, following its announcement that it entered into a $60 million agreement with HomeGrocer.com. The Kirkland, Wash.-based company will provide groceries across several AOL brands, including AOL, CompuServe, Netscape, Digital City and Oxygen.com.
Software giant Microsoft (MSFT: Research, Estimates) fell into the spotlight again Tuesday. The company returned to court, after settlement talks between the company and the U.S Justice Department broke down.
The Judge in Microsoft's landmark antitrust case Tuesday compared the company to Standard Oil, a monopoly that was broken up by the government nearly 90 years ago. Microsoft shares ended Tuesday's session down 1-1/4 at 93-13/16, a 1.3 percent decline on the day.
Meanwhile, companies that specialize in the Linux operating system - a public-domain alternative to Microsoft's ubiquitous Windows platform - edged higher. Shares of Red Hat (RHAT: Research, Estimates), the best-known commercial Linux distributor, rose 1/8 to 71-5/8. At the same time, VA Linux (LNUX: Research, Estimates) shares surged more than 3 percent, ending the session up 3-1/2 at 119.
Also heading higher in the software segment Tuesday were shares of Siebel Systems (SEBL: Research, Estimates) added 7-5/16 to 121-7/8, a 6.4 percent advance on the day. Intuit (INTU: Research, Estimates) shares added 15/16, or 1.5 percent, to 62-1/8. Symantec (SYMC: Research, Estimates) shares edged up 5/16 to 64-5/16.
The tech-laded Nasdaq composite index ended Tuesday's session down 29.62, at 4,382.12
-- from staff and wire reports