Updated from 1:40 p.m. EST with new stock prices

Tech stocks traded higher Thursday as buyout speculation swirled around some of the sector's big names, while the broader market indices turned positive on the prospects of another rate cut.

Logitech ( LOGI) jumped 6.5% on chatter that Microsoft ( MSFT) may bid for the company. Shares were up $ 2.01 to $33.07. "The combination of Microsoft and Logitech would be interesting and make some strategic sense," wrote Manuel Recarey, an analyst with Kaufman Bros. "However, a merger would also raise some issues that the combination would need to overcome, including regulatory concerns," he told clients in a research note. Microsoft fell 11 cents, or 0.3%, to $34.33.

Yahoo! ( YHOO) also gained 6.8% on a report in the New York Post suggesting that Microsoft is still debating whether it should make a bid for the company. Yahoo! shares rose $1.53 to $24.09.

AMD ( AMD) recovered some ground Thursday. Shares surged on news that rival Intel is being investigated by the New York Attorney General's office for possible antitrust violations for coercing customers to exclude AMD from the microprocessor market. AMD was up 44 cents, or 8%, to $5.97. Intel ( INTC) fell 21 cents, or 0.9%, to $22.54.

Video-games retailer GameStop ( GME) fell $2.89, or 5.2%, to $52.22 despite boosting its fourth-quarter earnings outlook . GameStop said sales for the nine-week holiday period ended Jan. 5 rose 34.7% to $2.33 billion from $1.78 billion a year ago. Comparable-store sales increased 20%, the company said. However, investors remained worried about the effect of an economic slowdown on consumer discretionary spending and the possibility of slower growth in the games sector this year.

Akamai Technologies ( AKAM) was off $ 1.19, or 4.1%, to $28.03 on speculation that Apple ( AAPL) is likely to use Google ( GOOG) to deliver audio and video to its iTunes store. Apple currently uses Akamai's products. Apple was down $1.38, or 0.8%, to $178.02. Google was down $6.47, or 1%, to $646.73.