Intel (NASDAQ: INTC) capped a rough day for stocks Wednesday by slashing its revenue guidance for the fourth quarter well below expectations.
The chip giant cited “significantly weaker than expected demand in all geographies and market segments” for the unusually early warning, which comes with seven weeks left in the quarter. Intel added that “the PC supply chain is aggressively reducing component inventories.”
Intel said it now expects sales of about $9 billion, give or take $300 million, compared to $10.4 billion Thomson Financial estimates and a previous guidance range of $10.1-$10.9 billion that the company gave just last month.
Intel shares fell 7% to a six-year low in after-hours trading on the news.
The warning underscores just how dramatically the economy has slowed in the two months since Lehman Brothers went bankrupt, sending a wave of forced selling across derivative and hedge fund markets and consumer and credit markets into a tailspin.
Investors got another reminder of the headwinds the economy is facing Wednesday morning, when Best Buy (NYSE: BBY) slashed profit expectations and the federal government backed away from its plan to buy troubled financial assets.
Best Buy lowered its earnings and sales forecast for the critical holiday season, calling the current consumer spending environment the “most difficult climate” the company has faced in its 42-year history.
Best Buy’s warning came just days after rival Circuit City (NYSE: CC) filed for bankruptcy and hit shares of Dell (NASDAQ: DELL), HP (NYSE: HPQ) and Apple (NASDAQ: AAPL).
Meanwhile, the federal government said it hopes to add credit cards, student loans and car loans to its financial rescue efforts while abandoning a plan to buy troubled assets, the initial purpose of the $700 billion plan. Federal financial agencies also issued a directive to banks to expand lending in an effort to unfreeze the credit markets.
Google (NASDAQ: GOOG) fell 6.6%, closing below $300 for the first time in three years, after Citigroup became the latest firm to lower estimates on the search giant. Amazon (NASDAQ: AMZN) lost 10%, and Research In Motion (NASDAQ: RIMM) fell 5.9% on a downgrade.
Concur (NASDAQ: CNQR) gained 5% on its results.
The Nasdaq lost 81 to 1499, the S&P fell 46 to 852, and the Dow tumbled 411 to 8282. Volume rose to 5.86 billion shares on the NYSE, and 2.22 billion on the Nasdaq. Decliners led by a 32-3 margin on the NYSE, and 25-4 on the Nasdaq. Downside volume was 96% on the NYSE, and 94% on the Nasdaq. New highs-new lows were 8-542 on the NYSE, and 3-578 on the Nasdaq.