Investors looking to Intel (NASDAQ: INTC) for clarity on the state of IT spending had to be disappointed with the company’s earnings report released late Tuesday.
Intel’s third-quarter earnings of 35 cents a share topped expectations by a penny, while sales of $10.22 billion were up slightly from the year-ago quarter but just below analysts’ estimates.
But it was the company’s fourth-quarter guidance that was most maddening. Intel predicted sales for the quarter of $10.1-$10.9 billion — anywhere from way below estimates to just above.
As CEO Paul Otellini said in a statement, “As we look to Q4, it is hard to know what impact the financial crisis will have on end customer demand. We are confident that our product portfolio, strong cash flow, commitment to deploying new technology and market momentum will allow us to outpace peer companies at a time when business levels are difficult to predict.”
Still, with the company’s gross margins holding up better than feared, the news was good enough to send Intel shares about 4% higher in after-hours trading after a 6% decline ahead of the report.
The rest of the market traded much the same way during the day, gapping up 4% to start the day only to sell off from there and end the day modestly lower. It’s been one of the most volatile periods in history for the stock market. After suffering through the worst week in its 112-year history last week, the Dow soared more than 11% on Monday as governments around the world stepped up bank rescue efforts. It was the Dow’s fifth best day ever and its best day in 75 years.
The Nasdaq lost 3.5% on Tuesday, significantly more than blue chip indexes, as investors worried about how soon frozen credit markets can return to normal.
Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Oracle (NASDAQ: ORCL), Dell (NASDAQ: DELL), Research in Motion (NASDAQ: RIMM), Yahoo (NASDAQ: YHOO) and Amazon (NASDAQ: AMZN) were among the names losing 5% or more on the day. Amazon fell 10% on an RBC Capital downgrade.
IBM (NYSE: IBM) and AMD (NYSE: AMD), which report earnings on Thursday, both edged higher. eBay (NASDAQ: EBAY), which will report Wednesday night, shed 2%.
The Nasdaq fell 65 to 1779, the S&P lost 5 to 998, and the Dow lost 76 to 9310. Volume rose to 8.25 billion shares on the NYSE, and 2.98 billion on the Nasdaq. Advancers led by a 19-16 margin on the NYSE, while decliners led 18-11 on the Nasdaq. Downside volume was 51% on the NYSE, and 84% on the Nasdaq. New highs-new lows were 66-160 on the NYSE, and 8-131 on the Nasdaq.
