By Rex Crum
Concerns about what the Federal Reserve will say about U.S.
monetary policy, along with some negative analyst views on the
state of the PC semiconductor market, conspired to drag the tech
sector into the red Tuesday.
Among chip stocks, Advanced Micro Devices Inc. (AMD) fell 5.7%,
and Micron Technology Inc. (MU) gave up 5%. LSI Corp. (LSI), Nvidia
Corp. (NVDA) and Marvel Technology Group Ltd. (MRVL) all saw their
shares fall more than 3%.
Before the market opened, J.P. Morgan analyst Christopher Danely
said in a research note that checks with Taiwanese chip suppliers
showed a downturn in orders, indicating that deals for personal
computers are "falling off a cliff."
"We believe a host of PC companies pushed out orders throughout
the supply chain," Danely said, adding that Hewlett-Packard Co.
(HPQ), Acer and Lenovo appear to be among companies that cut their
PC orders.
Danely went on to lower his earnings and sales estimates on
Intel Corp. (INTC) for the year.
Robert W. Baird analyst Tristan Gerra cut his rating on Intel's
stock to neutral from outperform, citing "a sharp deterioration in
PC-related order trends over the last week."
Intel shares fell 3.5% after the analysts' actions.
The chip sector's losses helped to send the Nasdaq Composite
Index (RIXF) down almost 40 points, or 1.7%, to 2,266. The
Philadelphia Semiconductor Index (SOX) was down 2.8%, and the
Morgan Stanley High Tech 35 Index (MSH) gave up 1.8%.
Among tech stocks, nearly every sector leader was in the red,
including Apple Inc. (AAPL), Oracle Corp. (ORCL), Google Inc.
(GOOG), Dell Inc. (DELL) and Cisco Systems Inc. (CSCO).
H-P shares edged up 6 cents to $42.66 after falling 8% Monday in
the wake of Chief Executive Mark Hurd's departure due to the result
of a sexual-harassment investigation and violations of the
company's standards of business conduct.