TECH STOCKS: Apple Leads Tech Selloff; Microsoft Gains

By Rex Crum and Dan Gallagher, MarketWatch

SAN FRANCISCO (MarketWatch) -- Selloff pressures on the technology sector eased somewhat by Monday afternoon, though most of the group was still well in the red, with Apple Inc. leading the drop.

The Nasdaq Composite Index (RIXF) was last down 0.7% to 3,334 while the Morgan Stanley High-Tech Index (MSH) fell 1.8% and the Philadelphia Semiconductor Index (SOX) gave up 1.5%. The Dow was last down about 60 points -- having shed more than 240 points earlier, as investors registered fears about a possible liquidity crunch in China.

Apple (AAPL) was last down 2.6% to $402.48 -- after falling below the $400 mark earlier in the day for the first time in two months.

Before the start of trading, Jefferies & Co. analyst Peter Misek cut his price target on Apple's stock to $405 a share from $420. In a research note, Misek also lowered his iPhone sales estimate for the third quarter of the year to 27 million units from 30 million.

"We remain cautious on Apple as it fills in its product gap" with what Misek estimates will be a 5-inch screen iPhone 6 next year. Misek also said that checks in the smartphone industry indicate longer inventory levels for mobile-network carriers, suggesting that products are sitting on the shelves longer than anticipated.

Microsoft (MSFT) was one of the few gainers, rising 2.4% to $34.06. The software giant will kick off its Build developers conference in San Francisco on Wednesday, where it is expected to preview its upcoming Windows Blue update.

But most other major tech stocks remained down by the afternoon. Google Inc. (GOOG) was down 1%, at $871.89, even though J.P. Morgan analyst Doug Anmuth raised his price target on the company's stock to $1,025 a share from $860 on overall positive sentiment for the company's business efforts.

Dell (DELL) shares were down a fraction to $13.32. The PC maker argued in a filing on Monday morning that a counter-proposal led by activist Carl Icahn "lacked credibility" and is risky.

Yahoo (YHOO) was down 3.9% to $24.22. The company will hold its annual shareholder meeting on Tuesday morning. Facebook (FB) fell nearly 2.8% by the afternoon.

Among major decliners by midday included Intel (INTC) , down 1.7%; EMC Corp. (EMC) , down 1.6%; and Hewlett-Packard Co. (HPQ) , down 3%.

One bright spot was Stec Inc.(STEC), which saw its shares almost double, to $6.70, after hard disk-drive maker Western Digital Corp. (WDC) said it would acquire the maker of solid state drives for $340 million, or the equivalent of $6.85 a share.

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