Uninspiring guidance from Texas Instrumentsand a sector downgrade from Bank of America sent chip stocks sprawling on Wednesday.
Texas Instruments reaffirmed fourth-quarter guidance after the close on Tuesday, but cited “a market environment characterized by ongoing inventory adjustments.” After surprisingly strong guidance from Intellast week, investors may have been looking for more from TI, which fell 4% during Wednesday’s trading session.
Bank of America downgraded seven chip stocks to “sell,” citing slowing growth and high inventories. The seven were Xilinx, Altera, Actel, Intersil, National Semi, Analog Devicesand Semtech.
The chip sector lost 2% on the day, despite strong gains in the broader market.
The sector’s woes continued after the bell, as Xilinx, Altera and Cymerall warned, sending the sector, as measured by the Semiconductor Holders Trustanother 2% lower after hours.
The broader market rebounded during the day as the dollar rebounded, GEwas upgraded, and Merckdelivered guidance that wasn’t as bad as feared.
The Nasdaq rose 11 to 2126, the S&P 500 climbed 5 to 1182, and the Dow gained 53 to 10,494. Volume declined to 1.53 billion shares on the NYSE, and 2.41 billion on the Nasdaq. Advancers led 19-13 on the NYSE, and 17-13 on the Nasdaq. Upside volume was 55% on the NYSE, and 39% on the Nasdaq. New highs-new lows were 88-40 on the NYSE, and 71-21 on the Nasdaq.
IBMedged higher as the company sold its PC business to China’s Lenovo.
Seagateclimbed 3% after raising guidance.
Vimpelplunged 22% on Russian tax problems.
Nortelgained 1% after the company announced plans to release limited results next week and to file its restated financial statements Jan. 10.
Siriusplunged 23% on 580 million shares on a Smith Barney downgrade.
Unisysfell 9% on a warning and downgrade.
Remecgained 5% on its results, while Photronicsfell 8% on its results.