AMD warning weighs on pre-open
Stocks futures weaker as Europe opening bounce fades
By Emily Church, CBS.MarketWatch.com
Last Update: 6:05 AM ET July 3, 2002
LONDON (CBS.MW) - U.S. futures were losing ground in pre-open trading on Wednesday as a bounce in European stocks sputtered and an overnight sales warning from chipmaker Advanced Micro Devices weighed.
AMD (AMD: news, chart, profile) slid 15 percent on Instinet to $7.50 at one point, before resting at $7.75-7.85. The chipmaker warned of a 3-16 percent miss on its own revenue target in the second quarter. The warning is the second this month from AMD; rival Intel Corp. (INTC: news, chart, profile) also warned in June amid a weak PC market. Intel was down a few ticks in Frankfurt in euro trading.
Bellwether techs were lower, pointing to a weaker start on the Nasdaq, at least at this early hour. Dell Computer (DELL: news, chart, profile) was seen off 40 cents at $24.15; Cisco Systems (CSCO: news, chart, profile) was marked down 40 cents at $12.15.
"We've been seeing this for a while: Light volume, no buyers and the market heading inexorably lower," said one London dealer. In something of a positive for U.S. stocks, the dollar was higher against the euro at 97.95 U.S. cents.
The 'Naz' dropped 3.3 percent Tuesday amid declines in semiconductor, Internet and biotech stocks. European markets lurched about Wednesday as rumors swelled on accounting quality in the telecoms industry and the potential for a break-up of Vivendi Universal (V: news, chart, profile) - where shares were down 11 percent in Paris as board members gather to tap a new CEO to guide the transatlantic media group through debt reductions.
Credit Suisse Group (CSR: news, chart, profile) shares were higher briefly after a report in German magazine Prior Boerse said the big Swiss bank will merge with German leading bank Deutsche Bank (DB: news, chart, profile). But the share gains didn't hold. Deutsche was down 0.2 percent in Frankfurt.
AMD offered no clues for the sales shortfall in the brief statement issued early Wednesday. Analysts say declining prices as well as a drop in unit sales are behind the weaker-than-forecast quarter for the chip group. See full story on AMD warning
The chip gloom spread to Europe, where leading names were each notching 3 percent declines, including Infineon (IFX: news, chart, profile), Philips (PHG: news, chart, profile), STMicroelectronics (STM: news, chart, profile) and equipment maker ASML (ASML: news, chart, profile).
Telecom equipment maker Alcatel (ALA: news, chart, profile) was down 17 percent in Paris amid continued concerns on spending plans by the big, debt-laden carriers.
AMD was not the only overnight warning for markets to contend with. Shares of Openwave (OPWV: news, chart, profile) and i2 Technologies (ITWO: news, chart, profile) were trading down in Europe at $2.90 and $1.20 respectively, Madoff Securities dealers said. The stocks were largely holding to overnight declines. Both issued warnings late Tuesday.
Other warnings came from Micromuse Inc. (MUSE: news, chart, profile), which traded down 59 cents to $3.45 overnight after the software designer warned earnings will miss expectations.
Epiphany (EPNY: news, chart, profile) and (INRG: news, chart, profile) also warned.
Mobile devices maker Research in Motion (RIMM: news, chart, profile) topped estimates for its first fiscal 2003 quarter, but some brokers overnight cautioned the company's outlook for financial performance looks hard to meet.
The company "executing well, but we believe there are few data points supporting guidance for a second half 2003 ramp in end-user demand," J.P Morgan Securities told clients.
Emily Church is London bureau chief of CBS.MarketWatch.com. |
