TECH STOCKS: SanDisk Gains, Palm Losses Color Tech Trading

By Rex Crum

Technology stocks turned mixed in early trading Friday as gains from SanDisk Corp. and losses from Palm Inc. highlighted the sector's action.

SanDisk (SNDK) shares climbed as much as 5%, to $22.50, shortly after Bank of America/Merrill Lynch raised its rating on the flash-memory developer to buy from underperform.

In addition to SanDisk, gains also came from Hewlett-Packard Co. (HPQ), Oracle Corp. (ORCL), IBM Corp. (IBM), Apple Inc. (AAPL) and Texas Instruments Inc. (TXN).

However, the tech-heavy Nasdaq Composite Index (RIXF) fell 4 points to 2,122, while the Morgan Stanley High Tech 35 Index (MSH) was also in the red. The Philadelphia Semiconductor Index (SOX) edged just above its breakeven line.

Palm (PALM) led the decliners, falling 60 cents a share, or more than 4%, to $13.84.

Late Thursday, Palm reported a first-quarter loss that grew from a year ago, but its sales turned out to be better than expected. Much of the revenue improvement was said to be based on strong sales of the new Pre smartphone, which is sold exclusively through Sprint.

However, Palm gave a second-quarter sales outlook that failed to meet Wall Street analysts' forecasts. Company officials also said they were working on new devices for other wireless carriers.

Declines also came from Dell Inc. (DELL), EMC Corp. (EMC), Cisco Systems Inc. (CSCO) and Intel Corp. (INTC).