TECH STOCKS: Techs Sink As Shares Of McAfee Plunge

By Benjamin Pimentel

The tech sector dipped early Friday, as shares of McAfee Inc. plummeted a day after the security-software company posted a drop in third-quarter earnings.

The Nasdaq Composite Index (RIXF) slipped 0.4% to 2,088 early in the session. The tech-heavy benchmark also was poised to close the week in the red.

Leading the decline was McAfee (MFE) shares of which lost 7% in the opening minutes of trading after the company reported 25% drop in profit.

"We think the street will view these results as disappointing," Deutsche Bank analyst Todd Raker said in a note. "It appears the macro has muted some of this momentum near-term, but remain encouraged that results will improve as the PC market and IT spending rebound."

Barclays Capital analyst Ben Reitzes affirmed the upbeat view of the PC space in a Friday note, saying, "checks ... still indicate rather healthy consumer PC unit demand trends in the back half of 2009."

But tech investors were taking a breather as the week drew to a close, and most major tech issues retreated. The Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index (SOX) were each down a fraction.

A bright spot came from BMC Software (BMC) shares of which gained more than 3% a day after the company posted a higher quarterly profit.

Meanwhile, shares of RealNetworks (RNWK) fell more than 1%, after posting gains earlier in the session. Late Thursday, the digital media company swung to a third-quarter profit.

Shares of KLA-Tencor (KLAC) lost more than 2%. On Thursday, the semiconductor capital equipment company reported a higher quarterly profit.

Shares of chipmaker Maxim Integrated (MXIM) also sank more than 2% after the company reported lower quarterly profit.