Worries that Intel will lower revenue guidance during its mid-quarter update on Thursday dragged stocks lower Monday.
Intel lost 2% on reports of weakness in back to school sales, but the company could make up for that with strong flash memory sales. Analysts have produced a steady drumbeat of negative reports on the chip sector lately, so Intel could give stocks a boost just by reaffirming guidance.
Analysts are looking for $8.88 billion in third-quarter revenue from Intel, up 13.4% from a year ago, and earnings of 30 cents a share, a 20% jump from the year-ago quarter. Intel said in July that it expects third-quarter revenues of $8.6-9.2 billion and gross margins of 60%.
Also weighing on the market Monday was another month of weak personal income, and nervousness ahead of this week’s Republican convention.
The Nasdaq fell 25 to 1836, the S&P 500 lost 8 to 1099, and the Dow declined 72 to 10,122. Volume declined to 848 million shares on the NYSE, and 1.01 billion on the Nasdaq. Decliners led 19-12 on the NYSE, and 20-9 on the Nasdaq. Downside volume was 80% on the NYSE, and 87% on the Nasdaq. New highs-new lows were 76-14 on the NYSE, and 29-41 on the Nasdaq.
HP lost 2% after Merrill Lynch expressed skepticism about the company’s push into consumer products. Merrill said it favors spinning off HP’s consumer division into a separate company. The Wall Street firm maintained a Neutral rating on the stock, saying it needs “to have confidence in execution” despite the stock’s seemingly low valuation.
Tessera climbed 4% after raising guidance.
Network Appliance lost 3% on more competition from EMC
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Manugistics finished unchanged on news of a shakeup at the top.
PFSWeb jumped 17% on a Fortune 500 contract win.
