BlackBerry slides as Fairfax deal fails to impress

SAN FRANCISCO (MarketWatch) — BlackBerry Ltd. retreated Tuesday as the initial lift from the news of a possible sale to Fairfax Financial fizzled while Applied Materials Inc. led gainers on the S&P 500.

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$BBRY: BlackBerry (BBRY)  sagged nearly 2% as the euphoria of a potential deal with Fairfax faded. The shares had recovered on Monday after the smartphone maker said it signed a letter of intent with Fairfax to negotiate a sale for $4.7 billion. But a closer look at the announcement suggests that the deal was hastily thrown together to shield the stock from further selling pressure, according to MarketWatch's Therese Poletti.

Reuters BlackBerry falls a day after landing a bid to go private.

$AAPL: Apple Inc. (AAPL)  shares edged up 0.3%. The stock's rating was raised to positive from neutral by Susquehanna on Tuesday after better-than-expected sales of new iPhone 5C and 5S models over the weekend. The firm also raised its price target for Apple shares to $625 from $440.

$FB: Facebook Inc. (FB)   shares jumped 4.2%. The social network on Tuesday was upgraded to a buy from neutral at Citigroup, which also raised its price target on the stock to $55 from $32.

$NOV: Shares of National Oilwell Varco Inc. (NOV)  reversed earlier gains to trade down 0.3%. The company said Tuesday it received authorization from the board to pursue a spinoff of its distribution business. The transaction is expected to close in the first half of next year and doesn't need approval from shareholders.

Gainers

Applied Materials (AMAT)  shares jumped nearly 7%. The company and Tokyo Electron Ltd. (JP:8035)  agreed to merge on Tuesday in an all-stock deal expected to close in the middle to second half of 2014. The combined company will have a market capitalization of about $29 billion. Tokyo Electron is a Japanese semiconductor production equipment maker founded in 1963.

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Lennar Corp. (LEN)  rose 4.2% after the home builder said early Tuesday that its third-quarter profit rose 39%. PulteGroup Inc. (PHM)  and D.R. Horton Inc. also recovered from the previous session's losses to trade higher. Separately, the S&P/Case-Shiller index rose 12.4% in July, its fastest annual pace since 2006.

Yahoo Inc. (YHOO)  shares were among the big S&P 500 (SPX)  gainers. The Internet company was profiled by Internet-based news service Minyanville, which noted that Yahoo is getting noticed again with Chief Executive Marissa Mayer at the helm.

Decliners

Red Hat Inc. (RHT)  shares tumbled 12%, the biggest decliner on the S&P 500. While the company posted second-quarter earnings late Monday that met expectations, the decline in new annualized billings was worrisome, according to J.P. Morgan analysts on Tuesday. "The company's preferred billings proxy only grew 8% versus consensus expectations of 14%, and importantly, we estimate that new annualized billings declined 11% from a year ago," they said in a note. J.P. Morgan maintained its underweight rating and price target of $39.

Carnival Corp. (CCL)  shares slumped 6.8%. The world's largest cruise operator said Tuesday its third-quarter profit fell to $1.20 a share from $1.71 a share in the year-earlier period.