Dell Follows Chip Stocks Lower
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There wasn't much reason for tech investors to smile on Thursday.
A downgrade sent the chip sector tumbling during the day, and Dell (NASDAQ: DELL) followed that up after the close with a surprisingly poor earnings report.
Bank of America/Merrill Lynch downgraded a host of chip stocks, among them Intel (NASDAQ: INTC), Texas Instruments (NYSE: TXN), Micron (NYSE: MU) and Marvell (NASDAQ: MRVL), on inventory concerns, and AMD (NYSE: AMD) also followed the sector lower despite a Broadpoint AmTech upgrade.
Kulicke and Soffa (NASDAQ: KLIC) lost 12 percent on its earnings report.
NetApp (NASDAQ: NTAP) was one of the day's few winners, up 4 percent on strong quarterly results.
The biggest surprise for the tech sector came after the close, when Dell reported surprisingly weak results.
Dell shares lost 6 percent after the company reported a 15 percent drop in sales to $12.9 billion, below $13.18 billion forecasts, and pro forma earnings of 23 cents a share were a nickel light of the Thomson Reuters forecast.
The company's consumer and enterprise businesses were below Wall Street expectations, and gross margins were also shy of forecasts.
Dell's results came just a week after strong results from HP (NYSE: HPQ).
The Nasdaq fell 36 to 2156, the S&P 500 slumped 15 to 1094, and the Dow lost 93 to 10,332. Volume declined to 4.18 billion shares on the NYSE, and rose to 2.26 billion on the Nasdaq. Decliners led by a 30-7 margin on the NYSE, and 21-5 on the Nasdaq. Downside volume was 88 percent on the NYSE, and 86 percent on the Nasdaq. New highs-new lows were 76-41 on the NYSE, and 32-28 on the Nasdaq.