Intel Falls With Merrill Downgrade
NEW YORK (Reuters) - Shares of No. 1 semiconductor maker Intel Corp (Nasdaq:INTC - news)., a new component of the Dow Jones industrial average, fell more than 5 percent on Friday after a downgrade from Merrill Lynch.
Intel was down 4-7/16 at 75-1/2, off a session low of 74. It was the second most-active stock on the Nasdaq market.
The drop in Intel helped send the Dow lower. The index was off 4 points, or 0.04 percent, at 10,591, down from a day's high of 10,676.65 points.
The Philadelphia Stock Exchange semiconductor index also slumped, dropping almost 4 percent.
Merrill analyst Joe Osha cut his rating on Intel to near-term accumulate from buy, a spokesman for the brokerage said.
''The number of challenges facing (Intel) for the next 12 months continues to mount,'' Osha wrote in a report.
He cut his price target on the stock to $90 from $100. He also trimmed the outlook for fiscal 2000 earnings per share to $2.55 from $2.69.
Worries include disruption of Intel's plans to launch a memory product tied to Rambus Inc (Nasdaq:RMBS - news). as well as competitive pressure from Advanced Micro Devices Inc (NYSE:AMD - news).
Advanced Micro told analysts on Thursday that it would unexpectedly break even in the fourth quarter after a string of losses.
Osha added that next year's launch of the IA-64, the next generation of major Intel chips, ''will prove disappointing to investors who have high expectations for the first generation of that product.''
Rambus shares tumbled with Osha's comments, falling 6-7/8 to 81-7/8.
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