TECH STOCKS: Adobe, Rackspace Losses Take Tech Spotlight

By Rex Crum, MarketWatch

SAN FRANCISCO (MarketWatch) -- Tech stocks rose Wednesday in an effort to add to the prior day's advance, but declines from Adobe Systems Inc. and Rackspace Hosting Inc. capped some of the sector's gains.

Among tech-sector leaders, gains came from Apple Inc. (AAPL), Hewlett-Packard Co. (HPQ) and online travel agent Priceline.com Inc. (PCLN). The tech-heavy Nasdaq Composite Index (RIXF) was up by 8 points at 4,560 and the Philadelphia Semiconductor Index (SOX) was also in positive territory.

However, Adobe (ADBE) shares fell 4.5% to $67.58 on reaction to the software company's latest quarterly results and forecast.

Late Tuesday, Adobe reported fiscal third-quarter sales of $1.01 billion, which was shy of the $1.02 billion forecast by Wall Street analysts. Adobe also said that for its fiscal fourth quarter, it expects to earn between 26 cents and 32 cents a share, on revenue in a range of $1.03 billion to $1.08 billion. Analysts had earlier forecast Adobe to earn 29 cents a share on $1.05 billion in sales for the quarter.

Rackspace (RAX) shares tumbled by more than 16% to $33. After Tuesday's market close, the cloud-computing company said it had stopped efforts to sell itself and would remain independent. Rackspace also appointed company President Taylor Rhodes as its new chief executive.

Microsoft Corp. (MSFT) was off by 20 cents a share. Late Tuesday, the software giant said it would raise its quarterly by 3 cents a share, or 11%, to 31 cents a share. Microsoft also named Kraft Foods Group Inc. Chief Financial Officer Teri List-Stoll and Visa Inc. CEO Charles Scharf to its board of directors. It was Microsoft's first dividend announcement and new director appointments since former CEO Steve Ballmer left the company's board in August.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires