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's shares, 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 1.5% following Wible's downgrade.

Declines also came from Netflix Inc. (NFLX), Hewlett-Packard Co. (HPQ) and Microsoft Corp. (MSFT). The Nasdaq Composite Index (RIXF) was near its breakeven point of 4,571 and the Philadelphia Semiconductor Index (SOX) dipped into the red. (Read more about the rest of the stock market in Movers & Shakers http://www.marketwatch.com/storyno-meta-for-guid.).

Apple Inc. (AAPL) was up 25 cents a share at $101.11. 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) and Groupon Inc. (GRPN) also advanced.

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

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