Tech stocks started Tuesday on a climb, but then retreated into the red following testimony by Federal Reserve Chairman Ben Bernanke that further shook investor confidence. The Nasdaq was down 61 points, or 3.3%, to 1802 in recent trading. AMD ( AMD) shares shot up after the chipmaker confirmed plans to spin off its manufacturing operations into a new joint venture with an Abu Dhabi investment firm as a way to cut down on costs. AMD's stock jumped 17.5% to $4.97 on the news. Shares of Google ( GOOG) and Yahoo! ( YHOO) were trading lower after Stifel Nicolaus cut estimates and offered a cautious outlook on both companies. The firm maintained a buy rating on Google but lower its price target to $525 from $600 after noting a "sharp slowdown in business activity" late in the third quarter. For Yahoo!, Stifel Nicolaus left its buy rating and price target of $26 unchanged, but cuts its earnings estimate for the year to 70 cents a share from 78 cents a share. Google was down 4.5% to $354.57, while Yahoo! was down 3.8% to $14.73. SAP ( SAP) shares slid for a second straight day after the Walldorf, Germany-based software maker warned on Monday that sales had dropped off sharply at the end of its third quarter as customers were holding back on their spending. Goldman Sachs chopped its price target to $43 from $56. Shares of VeriSign ( VRSN) were up 2.1% to $24.46 after the company announced the sale of its minority share in a mobile entertainment joint venture to News Corp. ( NWS).
VeriSign and News Corp. had formed the joint venture in 2007, when News Corp. acquired a controlling interest in VeriSign's wholly-own Jamba, and combined it with Fox Mobile Entertainment. "This sale is an important step in our effort to focus on our core businesses in Internet infrastructure," said Jim Bidzos, interim chief executive of VeriSign. eBay ( EBAY) shares continued to slump on Tuesday after at least three analysts cut their price targets following the online auction site's announcement on Monday that it would cut 10% of its workforce and revise its revenue guidance to the lower end of its estimates. eBay on Monday also announced on Monday that it planned to purchase Bill Me Later, an online payment service, as well as Denmark's online classifieds site, dba.dk, and vehicles site, bilbasen.dk. "eBay's acquisitions of BillMeLater for $945M and of Danish classified sites for $390M are consistent with the company's goals of expanding in Payments & Classifieds, but we believe the BillMeLater business could modestly raise the risk-profile of eBay's overall Payments business as we head into a tougher consumer-credit environment," wrote Barclays analyst Doug Anmuth, who cut eBay's price target to $22.50. Shares of data networking specialis F5 Networks ( FFIV) were up 2.3% to $22 after the company on Tuesday said that it expects its fourth-quarter revenue to be $171.3 million instead of its previous guidance of $172 million to $174 million. But it also said that it would meet its earnings estimate of between 19 cents a share and 20 cents a share.