Late gains help give a boost to tech stocks

By Rex Crum, MarketWatch

Last Update: 4:14 PM ET Nov 3, 2009

SAN FRANCISCO (MarketWatch) -- Technology stocks came to life in late trading Tuesday with several sector leaders gaining ground as the Federal Reserve began a two-day meeting on the U.S. economy.

Among leading tech stocks, gains came from IBM Corp. (IBM), Dell Inc. (DELL), Adobe Systems Inc. (ADBE), Google Inc. (GOOG) and Texas Instruments Inc. (TXN.)

The tech-heavy Nasdaq Composite Index ($COMPQ) erased its early losses to rise 8 points to close at 2,057., while the Morgan Stanley High Tech 35 Index (MSH) also edged higher. However, the Philadelphia Semiconductor Index ($SOX) fell 1.3%.

The tech-sector's performance came as the Federal Open Market Committee was set to begin a two-day meeting. The Fed is expected to make a decision on interest rates Wednesday afternoon. See full story about the Fed.

Cisco Systems Inc. (CSCO) shares fell 9 cents to $22.91, but EMC Corp. (EMC) rose 12 cents a share to $16.55 and VMware Inc. (VMW) climbed 67 cents a share to close at $39.12. The three companies announced a new partnership to spur the use of cloud-computing and virtualization technologies.

Read more about the Cisco-EMC-VMware partnership.

Memory-chip makers Micron Technology Inc. (MU) and SanDisk Corp. (SNDK) were bruised a bit after Wedbush analyst Betsy Van Hees cut her rating on the stocks.

Hees lowered her view of Micron to neutral from outperform and cut her rating on SanDisk to underperform from neutral, saying memory supply looks likely to exceed demand in the first quarter of 2010.

Micron shares came back from an early drop of 3% to rise 7 cents to $6.65, while SanDisk gave up 55 cents a share to end the day at $20.31.

Media technology company Sonic Solutions Inc. (SNIC) posted one of the day's strong performances, rising 89 cents a share, or 17%, to close at $6.13.

Before the market opened, Sonic said it reached a deal with Best Buy Co. Inc. (BBY) to provide on-demand digital content technology to a new Best Buy online service. Best Buy also received a warrant to purchase shares of Sonic's common stock. See full story on Best Buy and Sonic.