Tech stocks end higher as Netflix, Apple rally

SAN FRANCISCO (MarketWatch) — Technology stocks ended higher on Monday, tracking the broader stock market as shares of Netflix Inc. and Apple Inc. rallied.

Netflix (NFLX)  rose 7.8% to close at $324.36 after The Wall Street Journal reported that the company is in talks with cable operators to include its streaming-video service in set-top boxes.

Netflix Netflix's original show "Derek" starring Ricky Gervais.

Apple (AAPL)  rose about 1% to close at $496.04. In a Sunday note, Mizuho Securities analyst Abhey Lamba wrote: "We expect a slight revenue and earnings per share beat driven primarily by strong iPhone shipments, which could offset any weakness in iPads."

The start of a new week with the federal government still shut down sent stocks falling in early trades, but the Nasdaq Composite Index (COMP)  recovered, rising 0.6% to close at 3,815.27. The Dow Jones Industrial Average (DJIA)  also turned positive, closing up 0.4% on news of a possible budget deal in Washington D.C.

Facebook Inc. (FB)  shares rose 0.8% to close at $49.51 after the social network announced its acquisition of Onavo, a privately held compression technology and mobile analytics company.

But Expedia Inc. (EXPE)  fell 6.2% to close at $48.51 after Deutsche Bank analyst Ross Sandler cut his rating on the online travel agency to hold from buy, citing intensifying competition in the U.S. market. Sandler also pointed to worries about management changes at Hotels.com.

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Other major tech issues were in the red, including Yahoo Inc. (YHOO)  , AOL Inc. (AOL)  and Groupon Inc. (GRPN) .

The Philadelphia Semiconductor Index (SOX)  was up a fraction, as some major chip stocks posted gains. Advanced Micro Devices (AMD)  climbed 3.7% to close at $3.97.

Wedbush analyst Betsy Van Hees raised her rating on the stock to outperform from neutral, telling clients in a note: "We believe in the near-term AMD will benefit from the ramp of gaming consoles and a modest lift from second half of the year seasonality, and longer-term is well positioned to gain market share in servers with its dual architecture strategy."

Shares of Intel Corp. (INTC) , Nvidia Corp. (NVDA)  and SanDisk Corp. (SNDK)  also posted gains.