11-6-13 11:11 AM EST | Email Article

By Dan Gallagher, MarketWatch


SAN FRANCISCO (MarketWatch) -- Microsoft Corp. saw its shares jump Wednesday morning following a report that the company is narrowing its list of CEO candidates, while several social-networking stocks slipped ahead of the expected pricing of Twitter's IPO.


The Nasdaq Composite Index slipped a fraction to 3,938, while the Morgan Stanley High-Tech Index was up 0.7%. The Philadelphia Semiconductor Index was down about 0.2%.


Microsoft (MSFT) shares were up more than 2.7% to $37.66. Reuters reported late Tuesday that the company has narrowed down its "shortlist" for CEO candidates, which reportedly include Ford (F) chief Alan Mulally and former Nokia (NOK) CEO Stephen Elop. Former Skype CEO Tony Bates is also reportedly on the list of candidates. The candidates are being considered to replace outgoing chief Steve Ballmer.


Also, Nomura analyst Rick Sherlund raised his price target on the stock, citing the potential for a new leader and reorganization "potentially extracting a lot more value out of the current assets." He raised his price target to $45 from $40, still rating the shares as a buy.


"We believe many investors are effectively being caught 'off sides' on Microsoft, still focusing on what could go wrong with the fundamentals, rather than what could go right with new management and likely changes in cost structure, disposition of money losing consumer businesses Bing and Xbox, corporate governance changes and financial engineering potentially extracting a lot more value out of the current assets," Sherlund wrote. "The harder issue will be repositioning the product portfolio to address faster growth opportunities for the enterprise cloud businesses and what it means to deliver innovative new consumer productivity products."


Twitter (TWTR) is expected to price its IPO tonight, ahead of a debut on the New York Stock Exchange on Thursday. The company currently plans to price 70 million shares in a range of $23-$25 per share.


Shares of Facebook (FB) and LinkedIn (LNKD) were both down by a fraction in early trades, while Yelp (YELP) dropped more than 4%. Groupon (GRPN) was down 3.3%.


Qualcomm (QCOM) shares edged higher in early trades ahead of the company's fiscal fourth-quarter report, due after the close.


Activision Blizzard (ATVI) shares were up 1.2% to $16.73. The company reported that "Call of Duty: Ghosts" has sold more than $1 billion into retail stores in its first 24 hours after the launch of the latest iteration of the blockbuster first-person shooter franchise. However, the company's statement Wednesday morning differs from launch figures from previous year's releases; Activision said last year's "Call of Duty: Black Ops 2" sold through more than $500 million to end customers in its first 24 hours.


"Although it is too early to assess sell-through for Call of Duty: Ghosts, it's launching at a time when the franchise has never been more popular," Bobby Kotick, CEO of Activision Blizzard, said in Wednesday's statement. Activision also reports quarterly results after the closing bell.


Apple (AAPL) shares slipped by a fraction in morning trades. The Wall Street Journal reported that the company has lined up new contract manufacturers to increase production of its iPhones and iPads.

-Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com


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11-06-13 1111ET

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Copyright 2014 MarketWatch
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Morningstar - 2013/11/6 - Microsoft jumps on report of CEO search
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