Intel Makes Matters Worse
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Intel late Tuesday gave no hope to a stock market already reeling from subprime mortgage woes and falling retail sales.
The chip giant posted quarterly results that were below Wall Street estimates then told investors to expect more of the same in the first quarter.
Coming a day after a pleasant surprise from IBM, investors punished Intel shares, sending the stock 13% lower in late trading.
For the current quarter, Intel said it expects sales of $9.4 billion to $10 billion analysts expect Intel to hit the top of that range, leaving plenty of room for more disappointment.
Gross margins were 58% in the fourth quarter and are expected to come in around 56% for the first quarter.
The company said it is "a little bit cautious" on the economy, but doesn't see signs of recession.
Intel's report could also mean another rough quarter for rival AMD, which will release quarterly results late Thursday.
Intel's results capped another rough day for stocks, which plunged on a dismal quarter from Citigroup and the weakest holiday retail season in five years.
Apple fell 5% after its Macworld announcements came in largely as expected.
Applied Materials edged higher on layoff plans.
Vignette was up 17% after raising guidance.
The Nasdaq fell 60 to 2418, the S&P lost 35 to 1380, and the Dow tumbled 277 to 12,501. Volume rose to 4.57 billion shares on the NYSE, and 2.44 billion on the Nasdaq. Decliners led by a 25-8 margin on the NYSE, and 23-7 on the Nasdaq. Downside volume was 92% on the NYSE, and 88% on the Nasdaq. New highs-new lows were 37-386 on the NYSE, and 41-411 on the Nasdaq.