TECH STOCKS: Facebook Leads Tech Stocks Lower

By Rex Crum, MarketWatch

SAN FRANCISCO (MarketWatch)--Facebook Inc. led the tech sector lower Wednesday after Janney Capital Markets analyst Tony Wible cut his rating on the social-networking giant, saying that naturally declining user metrics could affect its share price.

The Information Technology sector of the S&P 500 was down 0.20% Tuesday.

Wible lowered his rating on Facebook (FB) to neutral from buy, saying that he expects the company's strong performance so far "will start to face valuation headwinds in 2015 as top line growth, engagement, and MAU [monthly average users] naturally decelerate." Wible said this may already be manifesting in the stock's muted reactions to upbeat earnings results.

Facebook shares fell 1.8% to close ast $74.63 following Wible's downgrade.

Declines also came from Netflix Inc. (NFLX), Google Inc. (GOOGL) and Microsoft Corp. (MSFT). The Nasdaq Composite Index (RIXF) shed one point to close at 4,569, while the Philadelphia Semiconductor Index (SOX) closed with a small gain. (Read more about the rest of the stock market in Movers & Shakers http://www.marketwatch.com/storyno-meta-for-guid.).

Apple Inc. (AAPL) rose $1.24 a share to close at $102.13. A report from Bloomberg said Apple is preparing to launch an iPad early next year with a screen that measures almost 13 inches diagonally.

Amazon.com Inc. (AMZN), Yahoo Inc. (YHOO), Groupon Inc. (GRPN) also advanced. Yelp Inc. (YELP) shares rose 47 cents to close at $82.86 as the online local business review and recommendation company was included in a Goldman Sachs report suggesting it could be an attractive acquisition target.

Chinese Internet kingpin Alibaba reported increases in its earnings and sales ahead of its IPO.

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