Monday's Tech Winners & Losers

Tech stocks were down modestly as investors mulled over Microsoft's unsolicited bid for Yahoo! and await Cisco's earnings later this week.

Shares of Yahoo!YHOO continued to gain after Microsoft MSFT offered $44.6 billion, or $31 a share, for the company Friday. Yahoo was up 95 cents, or 3.3%, to $29.33. Shares of Microsoft remained mostly unchanged, up 7 cents, or 0.2%, to $30.53.

Real NetworksRNWK gained 29 cents, or 4.9%, to $6.24 after the company's Rhapsody music service partnered with Yahoo! to replace Yahoo!'s Music Unlimited service.

In the next few weeks Yahoo!'s music subscribers will migrate to Rhapsody's digital music service, where they will have the opportunity to maintain their existing pricing tiers for a limited time before being offered new alternatives.

Handset maker PalmPALM gained 37 cents, or 6.1%, to $6.39 after an analyst at JP Morgan upgraded the stock to underweight from overweight on the belief that new products and its recently introduced Centro smartphone will help drive revenue.

MotorolaMOT fell 47 cents, or 3.7%, to $12.22 after a downgrade to sell from neutral by AmTech Research amid reports that the company might sell its cell phone business.

"Motorola's plans to evaluate strategic options hurts the long-term upside case in that a sale would come at depressed values and the process alone will impair turn-around attempts," said Mark McKechnie in a research report. McKechnie set a price target of $12.69 for the stock.

CiscoCSCO fell $1.04, or 4.2%, to $23.89 ahead of the company's second-quarter earnings Wednesday.

Analysts polled by Thomson Financial are expecting EPS of 38 cents in the second quarter on $9.79 billion in revenue, compared with EPS of 33 cents on $8.43 billion in revenue a year ago. For the third quarter, analysts expect earnings of 39 cents a share on $10.19 billion in revenue, compared with earnings of 34 cents a share on $8.86 billion in revenue.

GoogleGOOG fell $20.05, or 3.9%, to $496. The company has raised anti-trust concerns around Microsoft's bid for Yahoo. The proposed deal, if completed, is expected to hurt Google the most.

Shares of BroadcomBRCM fell $1.17, or 5%, to $22.26 after a JP Morgan analyst downgraded the stock to neutral from overweight.

An unstable economic environment and the company's focus on baseband chips used in communications puts pressure on its operating margins and stock, the analyst said.