Intel, Yahoo Fail to Inspire

Intel and Yahoo posted solid quarterly results late Tuesday, but they left investors wanting more, as shares of both companies traded lower after hours.

Intel’s earnings of 22 cents a share and sales of $8.7 billion were much better than expected, and current quarter sales guidance of $9.1-$9.6 billion was in line with estimates, but gross margins of 46.9% were more than a point below expectations, as the chip giant’s ongoing price war with AMD continues to take a toll. Intel forecast 52% margins “plus or minus a couple of points” for the current quarter, but its shares fell 4% in extended trading.

Yahoo, meanwhile, met estimates with 11-cent-a-share earnings and revenue after traffic acquisition costs of $1.24 billion, but current quarter sales guidance of $1.17-$1.31 billion was to the low end of $1.29 billion estimates. Yahoo shares lost 3% in late trading.

Stocks edged higher during the day on a tame wholesale inflation report, but the major indexes finished well off their highs after the Dow couldn’t close above 14,000 for the first time.

Novellus soared 11% after beating earnings and sales estimates, and Adtran gained 3% on its results. But Answers fell 12% after lowering sales guidance and announcing an acquisition.

BEA edged higher on takeover speculation by a Credit Suisse analyst.

The Nasdaq gained 15 to 2712, the S&P 500 slipped fractionally to 1549, and the Dow gained 20 to 13,971. Volume rose to 2.98 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Declining issues led by an 18-13 margin on the NYSE, while advancers held a 15-14 edge on the Nasdaq. Downside volume was 58% on the NYSE, and 35% on the Nasdaq. New highs-new lows were 226-108 on the NYSE, and 208-104 on the Nasdaq.

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