Jury Backs Rambus, Traders Back Away

Rambus shares jumped early in the day ahead of a court ruling on patent infringement claims brought by Hynix, Micron and Nanya. The optimistic speculation was rewarded when a Federal Court jury ruled in Rambus' favor, sending its shares up 35%.

The ruling will allow Rambus to collect a prior court's $133.4 million ruling against Hynix, pursue additional litigation against rivals and, more importantly, "will also help Rambus collect royalties of $700 million to $11.7 billion over the next 13 years," Bloomberg reports.

Motorola gained 2.5% after succumbing to pressure from Carl Icahn to do something (anything) with its handset business. Having failed to find a buyer or joint-venture partner, Motorola now plans to spin off the struggling unit although "no one is going to want to hold onto the stock from Mobile Devices if there's not some concrete evidence that its fundamentals and market position are improving," writes Bob Faulkner of TheStreet.com's Telecom Connection.

Shares of Clearwire and Sprint rose (but closed off earlier highs) after The Wall Street Journal reported they will provide the WiMax technologies to run a new wireless venture between Comcast and Time Warner. Intel and Google may provide additional funding for the venture, the Journal reports.

But those gains were not enough to overcome the overall negative tone. Many traders came into the day expecting a setback after the vicious rally of the prior week. Adding to the negative tone: disappointing economic data (is there any other kind these days?) the potential collapse of Clear Channel's private equity deal and a downgrade of big-cap U.S. banks by influential analyst Meredith Whitney of Oppenheimer.

The Dow and S&P each fell 0.9% and the Nasdaq lost 0.7%.

Cisco was a big drag on the index, falling 3.9% in the wake of Jabil's weak guidance. There's a high correlation between Cisco's revenue and Jabil's networking business, Tech Trader Daily reports, citing JMP Securities analyst Samuel Wilson, who writes: "Unless Cisco starts to see a rebound in orders in the near future, there is risk that estimates are too high for the July and October quarters."

Next up: Oracle's earnings, which were in line with expectations of 30 cents per share, although revenue of $5.3 billion is about $100 million shy of consensus. The conference call is slated for 5 pm ET; the fate of more than just Larry Ellison's firm may rest on what gets said.