By Rex Crum
Tech stocks lost ground Tuesday as negative analyst views on the
state of the PC semiconductor market and concerns about what the
Federal Reserve will say about U.S. monetary policy held the sector
in the red.
Among chip stocks, Advanced Micro Devices Inc. (AMD) fell 8%
while Micron Technology Inc. (MU), Nvidia Corp. (NVDA) and Marvel
Technology Group Ltd. (MRVL) each gave up more than 4%. LSI Corp.
(LSI) stock fell more than 6%.
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 more that 4% after the analysts' actions.
The chip sector's losses helped to send the Nasdaq Composite
Index (RIXF) down 42 points, or almost 2%, to 2,263. The
Philadelphia Semiconductor Index (SOX) was down 3.4%, and the
Morgan Stanley High Tech 35 Index (MSH) gave up more than 2%.
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 fell 2 cents to $42.58 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.