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Today saw bearish action from the tech sector. The tech sector followed the market lower as all three of the main indices - the Dow, the S&P 500 and the Nasdaq,- recorded losses in excess of 1%. Like most of the market, technology stocks suffered from the poor European outlook. The sector fell 0.94%, wiping out much of the gains it recorded on Monday. However, it was the best performing sector as every other sector dropped more than 1%. The energy and consumer cyclical sectors suffered particularly as they were down 2.95% and 2.28%, respectively.

Notably, Facebook (NASDAQ:FB) continued its poor form since its IPO, down 2.25%, and sinking to new lows of $27.86 per share. The social network has struggled to justify its high valuation to investors, especially due to its high price/earnings ratio which on IPO day was in excess of 100. Research In Motion (RIMM) and Nokia (NYSE:NOK) posted heavy losses as both fell more than 7%. Research In Motion has come under scrutiny recently for high profile management leaving, while Nokia relinquished its position as the leading mobile phone vendor to Samsung (OTC:SSNLF) earlier this year.

In May, the technology sector performed slightly worse than the markets, losing 8.24% versus the S&P 500 6.04% drop. The coming month of June will be an interesting one for a technology sector which has fluctuated significantly in recent weeks after being plagued by heavy losses in several large-cap stocks such as Dell (NASDAQ:DELL), Hewlett Packard (NYSE:HPQ) and Research In Motion. I believe Nokia is the stock to watch. It is currently trading at a price/sales ratio of just 0.21 with a market capitalization of $10.26 billion. A surprising position for the mobile phone vendor as it still has a large position in the market, solid royalties revenues which are increasing, and a potentially lucrative deal with Microsoft (NASDAQ:MSFT).

Top Gainers

  • Neonode (NASDAQ:NEON) up 28.03%
  • Synacor (NASDAQ:SYNC) up 14.51%, down 1.01% after hours
  • FuelCell Energy (NASDAQ:FCEL) up 9.01%
  • FormFactor (NASDAQ:FORM) up 6.42%
  • EnerSys (NYSE:ENS) up 6.10%

Top Losers

  • Valence Technology (VLNC) down 15.19%
  • Ubiquiti Networks (NASDAQ:UBNT) down 12.75%
  • magicJack VocalTec (NASDAQ:CALL) down 9.93%
  • Daktronics (NASDAQ:DAKT) down 9.88%
  • Elephant Talk Communications (NYSEMKT:ETAK) down 8.42%

Key Events

  • At the All Things Digital conference in California, Apple's (NASDAQ:AAPL) CEO Tim Cook suggested that Apple will tighten its secrecy over new product releases. He also hinted at a move away from dependency on Asian manufacturing and a move back to U.S. production, possibly suggesting a different strategic approach for the company. At the conference, Tim Cook once again praised his predecessor, saying Steve Jobs was a "visionary: and his "role was never to replace him." (here)(here)
  • It has been suggested that Facebook's botched IPO was as a result of technological mishaps rather than as a result of industry rules being broken. Consequently, the SEC might suggest reforms to the system that prevent this from happening including a way of signaling to investors and the markets that the opening trade has been completed. (here)
  • Morgan Stanley's (NYSE:MS) CEO has pointed the finger at the Nasdaq for the blunders in Facebook's IPO. This is an interesting approach for the bank after it has recently been suggested that Morgan Stanley, JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS) all cut their revenue projections for Facebook mid-IPO, and only informed certain clients, mainly institutional investors. If these rumors turn out to be true, then it seems hypocritical of Morgan Stanley's CEO to attribute blame to the Nasdaq. (here)
Source: Wednesday's Tech Recap