Chip Stocks Lead Market Lower
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A steep sell-off in the chip sector led the Nasdaq lower on Tuesday, while disappointing results from Alcoa (NYSE: AA) weighed on the broader market.
Micron (NYSE: MU), AMD (NYSE: AMD), Applied Materials (NASDAQ: AMAT), Texas Instruments (NYSE: TXN), KLA-Tencor (NASDAQ: KLAC), Nvidia (NASDAQ: NVDA) and SanDisk (NASDAQ: SNDK) lost 3 percent each after a Wedbush analyst said the chip sector could be vulnerable to a near-term correction based on sentiment.
The jitters were understandable just two days ahead of Intel's (NASDAQ: INTC) quarterly earnings report. Analysts are looking for strong year-over-year growth from Intel, with a 23.5 percent sales increase to $10.16 billion and earnings of 30 cents a share, according to Thomson Reuters.
But Cirrus Logic (NASDAQ: CRUS) soared 20 percent after raising its outlook, and Emulex's (NYSE: ELX) much stronger than expected results were good for 10 percent gains for the company and rival QLogic (NASDAQ: QLGC).
IBM (NYSE: IBM) and Dell (NASDAQ: DELL) also escaped the sell-off on an upbeat IT spending outlook from Forrester.
Salesforce (NYSE: CRM) tumbled 7 percent on an analyst's downgrade and plans to raise $500 million in debt.
The Nasdaq slipped 30 to 2282, the S&P 500 lost 10 to 1136, and the Dow rose 36 to 10,627. Volume rose to 4.72 billion shares on the NYSE, and 2.4 billion on the Nasdaq. Decliners led by a 27-10 margin on the NYSE, and 19-7 on the Nasdaq. Downside volume was 81 percent on the NYSE, and 75 percent on the Nasdaq. New highs-new lows were 219-26 on the NYSE, and 91-11 on the Nasdaq.