SAN FRANCISCO (AFX) -- Red Hat Inc. shares sank early Monday following a Wall Street downgrade as the broader technology sector struggled to find momentum ahead of financial results this week from some of the industry's biggest names.
Red Hat fell more than 5% to $28.88 as Goldman Sachs cut its rating to underperform from in-line, saying the open-source software provider's growth may force partners Oracle Corp. and International Business Machines Corp. to decide whether to stick with Raleigh, N.C.-based Red Hat or push Linux with their own bundled software offerings.
Broadly, the tech-heavy Nasdaq Composite Index inched up 2.51 points ahead of earnings this week from tech giants IBM, Apple Computer Inc, Texas Instruments Inc. and Intel Corp.
The Philadelphia Semiconductor Index rose 2.89 points, while the Morgan Stanley High Tech 35 Index advanced 2.67 points. The Goldman Sachs Hardware Index was little changed.
Elsewhere, Comverse Technology came under pressure after the software provider said it would have to restate earnings for the past six years due to the misdating of stock options to executives. The company said it also plans to take an undisclosed non-cash charge.
Moreover, Comverse delayed its annual report and said it doesn't expect to comply with Nasdaq Stock Market listing standards but would seek a hearing with the exchange if it's in danger of being delisted. The stock dropped more than 3% to $23.30. This story was supplied by MarketWatch. For further information see www.marketwatch.com.