Analysts Pile On Intel

If Intel lowers guidance during its mid-quarter update after the close on Thursday, investors won’t be able to say they weren’t warned.

Morgan Stanley and J.P. Morgan on Tuesday became the latest Wall Street firms to say they expect Intel to warn when it reports on its third-quarter progress. Analysts expect Intel to report third-quarter revenue of $8.88 billion, but Morgan Stanley said it now expects sales of $8.7 billion, and J.P. Morgan lowered its expectations to $8.8 billion.

The analysts cited high inventory levels, falling margins and weaker than expected back-to-school sales for their pessimism. Intel’s update will be the first glance at third-quarter technology earnings, and could help set the tone for the seasonally weak months of September and October, historically the weakest period of the year for stocks.

Also affecting Friday’s trading will be the August employment report. Analysts are looking for job gains of 150,000 — a level that some economists think is the minimum needed each month to sustain the economic recovery. The economy produced a disappointing 32,000 new jobs in July.

Stocks managed to finish Tuesday’s session with modest gains, despite an early decline on downgrades to Intel and weak consumer confidence and factory reports.

The Nasdaq rose 1 to 1838, the S&P 500 added 5 to 1104, and the Dow gained 51 to 10,173. Volume rose to 1.13 billion shares on the NYSE, and 1.31 billion on the Nasdaq. Advancers led 23-10 on the NYSE, and 18-12 on the Nasdaq. Upside volume was 67% on the NYSE, and 46% on the Nasdaq. New highs-new lows were 121-21 on the NYSE, and 46-50 on the Nasdaq.

After the close, Copper Mountain said it is exploring strategic alternatives. Open Text missed estimates, and Ingram Micro reaffirmed guidance.

During the day, PalmOne plunged 11% on concern about possible competition from Nokia .

Veritas fell 4% on an acquisition.

Apple rose 1% on its new iMacs.

Schwab slipped after selling its research division.

Moscow CableCom rose 6% after obtaining financing.

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