Tech Stocks: AOL climbs on patent deal, but other techs stumble

SAN FRANCISCO (MarketWatch) � Big gains from AOL Inc. following a patent sale to Microsoft Corp. stood out among tech stocks in what was an otherwise downbeat Monday for the sector.

AOL AOL �shares surged almost $8, or more than 43%, to close up to $26.40 after the company said it would sell more than 800 patents to Microsoft MSFT �for $1.06 billion. Microsoft also will receive nonexclusive rights to AOL�s remaining portfolio of more than 300 patents. Read Rex On Techs for more about how AOL became $1 billion richer in one day.

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Facebook is acquiring Instagram for $1 billion in in what is the social network's biggest acquisition. (Photo: Getty Images)

Neither AOL nor Microsoft specified what patents were involved.

AOL said it intends to �return a significant portion of the sale� to its shareholders and would determine by what method before the transaction closes. Had the deal occurred prior to the end of its 2011 fiscal year, AOL said it would have $15 a share in cash.

Microsoft shares fell 42 cents, or 1.3%, to close at $31.10 after the deal�s announcement.

Nearly every other major tech stock was also in the red as investors showed their negative feelings about last Friday�s disappointing jobs report. U.S. stock markets were closed in observance of Good Friday, producing Monday�s delayed reaction.

The Labor Department said that the economy created only 120,000 jobs in March, which was below expectations for expansion in nonfarm payrolls. Read more about reaction to the latest jobs data.

/quotes/zigman/577531/quotes/nls/aol AOL 28.71, +0.30, +1.06%

The negative sentiment helped push the Nasdaq Composite Index COMP �down by more than 33 points to 3,047. The Philadelphia Semiconductor Index SOX �shed 1.5% and the Morgan Stanley High Tech 35 Index MSH �also closed in the red.

Losses also came from Dell Inc. DELL , Oracle Corp. ORCL , Google Inc. GOOG , Micron Technology Inc. MU �and International Business Machines Corp. IBM , among others.

Facebook Inc. FB , which plans to go public soon, caused a stir when it said it would acquire Instagram, a popular service for sharing photos from mobile devices, for approximately $1 billion. � Read more about Facebook snapping up Instagram in its largest acquisition to date.