Wall Street Beat: M&A, earnings, IPO stir tech trading

NEW YORK - The dog days of summer are not providing technology investors with respite from financial and trading news. Heating up the market this week, earnings-season stragglers Dell and Cisco Systems  reported quarterly results, Yahoo and Qualcomm announced acquisition news, and Chinese search engine company Baidu.com's initial public offering (IPO) sparked a skyrocketing share price that declined as the week wore on.

Monday, rumors of Yahoo's impending acquisition of a big share of Chinese e-commerce company Alibaba.com sent Yahoo shares (ticker symbol: YHOO) up by $0.42, to close at $33.94. The companies confirmed Thursday in Beijing that Yahoo would take a 40 percent share of the company, for $1 billion.

The move gives Yahoo a strong presence in the burgeoning Chinese Internet market, as the companies plan to merge e-commerce, search and communication offerings in an effort to combat local companies such as Sina and Netease.com as well as U.S. companies such as Google, which also has stepped up Chinese operations. Tech investors appear to like the concept, pushing up Yahoo shares by $0.75 Thursday, to $34.94.

Also on Thursday, Qualcomm announced a major deal in its own right -- a $600 million acquisition of mobile communications technology developer Flarion Technologies. Flarion's wireless broadband OFDMA (Orthogonal Frequency Division Multiplex Access) technology will complement Qualcomm's CDMA (Code Division Multiplex Access), and help the company appeal to service providers that want to hedge their bets in the mobile market. Tech traders supported the move with their wallets, boosting Qualcomm (QCOM) shares by $1.35, to close at $40.56.

At the tail end of the earnings season, after the market closed Thursday Dell hit one of the few big sour notes in a generally positive month of financial reports. Reporting that the average price of units sold had declined, the company said that revenue in the quarter ended in June was $13.4 billion, up from $11.7 billion last year but lower than the consensus analyst forecast of $13.7 billion, as compiled by Thomson First Call. Earnings per share excluding tax benefits were $0.38, matching the analysts' forecast, but news about the average sale price is likely to worry investors, who even before the report pushed down the company's share price by $0.15 to close at $39.58. In after-hours trading the share price plunged to about $37.

On Tuesday after the market closed, Cisco reported solid revenue and net income for the quarter, but its guidance for the current quarter disappointed analysts. Revenue was $6.6 billion for the quarter, a record and up from $5.9 billion a year earlier. Profits were $1.5 billion, up from $1.4 billion a year earlier. The numbers matched expectations by analysts polled by First Call. However, the company said revenue for the current quarter would be about 10 percent up from last year, and be flat or slightly down from last quarter. This is slightly below what analysts were expecting. Company shares (CSCO) lost $0.97 Wednesday to close at $18.64.

Shares of Chinese search engine Baidu.com settled down somewhat during the week after a spectacular IPO on the Nasdaq exchange last Friday. Shares in the company, 2.6 percent of which is owned by market darling Google, were fueled by the recent renewed interest in the Chinese Internet market and soared to more than $150 at one point Friday, closing at $122.54. It was the biggest gain for a first day of trading since 1999. Monday, as traders cashed out, shares closed at $115.50, and share valuation over subsequent days drifted lower amid fears that the company is overvalued. Nevertheless, the company closed Thursday at $97.90, well above the range of $23 to $25 that the company listed as its expected IPO price.