TECH STOCKS: Rackspace, Zynga Get Noticed Among Tech Gainers

By Rex Crum, MarketWatch

SAN FRANCISCO (MarketWatch) -- Tech stocks wavered a bit as some of the sector advanced, but Rackspace Hosting Inc. maintained its gains following a rating upgrade from Morgan Stanley and Zynga Inc. climbed as one of its rivals readied to price its IPO after the market close.

Rackspace (RAX) pulled back from its high point, but remained up by more than 3% at $33.82 a share. Before the market opened, Morgan Stanley analyst Simon Flannery raised his rating on Rackspace's stock to overweight, or buy, from equal-weight, and set a price target of $45 a share.

Flannery cited improvements in order bookings and a differentiated product line among the reasons for his rating upgrade.

Zynga (ZNGA) came back from its losses on Monday to rise more than 4% to $4.91 a share. An IPO from Zynga rival King Digital Entertainment was expected to price after the close of trading Tuesday. However, skepticism over the growth prospects for the "Candy Crush Saga" developer began to weigh on the opinions of some industry analysts.

Attention was also being given to Box Inc., as the cloud-computing company filed its initial paperwork late Monday to go public.

Amazon.com Inc. (AMZN) was up by $3.64 a share at $355.49 one day ahead of the e-commerce kingpin's AWS Summit in San Francisco, where the company will give updates on its growing Web services business.

Microsoft Corp. (MSFT) shares were down by almost 1% at $40.12. Anticipation continued to grow in advance of Chief Executive Satya Nadella's first press conference as CEO on Thursday.

EBay Inc. (EBAY) rose by 40 cents a share to $56.94. The e-commerce leader issued a "definitive" proxy statement and set a date of May 13 for its annual shareholders meeting.

In its letter to shareholders, eBay urged shareholders to vote against a nonbinding proposal by investor Carl Icahn for the company to spin off PayPal in an IPO. EBay is also against Icahn's efforts to get two of his nominees on the company's board of directors. On Monday, Icahn called his plan for eBay to spin off 20% of PayPal as one of "pragmatism."

Among other bellwether tech companies, gains came from Apple Inc. (AAPL), Facebook Inc. (FB), IBM Corp. (IBM) and Hewlett-Packard Co. (HPQ).

The Nasdaq Composite Index (RIXF) rose more than 14 points to 4,241 and the Philadelphia Semiconductor Index (SOX) was up by almost 1%.

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