Just posting an assessment of today's market action so far by Mktwatch.com
<<Chips, hardware roiled by data, Intel
By Chris Kraeuter, CBS.MarketWatch.com
Last Update: 12:56 PM ET Aug 27, 2002
NEW YORK (CBS.MW) -- A drop in consumer confidence and comments from Intel's top executive weighed on hardware and chip stocks Tuesday.
The Goldman Sachs Hardware Index ($GHA) lost 2.6 percent to 164.64 while the Philadelphia Semiconductor Index ($SOX) gave up 4.6 percent to 321.31.
Consumer confidence fell in August to its lowest level since November 2001. Lynn Franco, director of the Conference Board's Consumer Research Center, said signals
indicate that business conditions have yet to turn around. "It also suggests that consumer spending is not likely to gain momentum any time soon," she said.
Also casting a pall over technology stocks were comments made by Intel CEO Craig Barrett. "We haven't seen much improvement in the computing environment because
companies are not investing," he said while speaking in Malaysia, according to reports from Reuters and Bloomberg. Shares (INTC) fell 4.7 percent to $17.28.
The comments echo those made by CFO Andy Bryant in mid-July. During a conference call on July 17, Bryant said Intel has yet to see momentum from an economic
recovery.
Barrett did not change his company's financial targets, which call for a modest seasonal increase in sales. Intel will host a midquarter update on Sept. 5.
Bear Stearns said Barrett's comments were not "new news." Analysts there noted that Intel stock is close to a bottom but wouldn't make any moves without a "catalyst."
Nonetheless, the losses in the chip sector were steep and broad. AMD (AMD), National Semiconductor (NSM), Micron (MU), and Texas Instruments (TXN) each lost
between 4 and 5 percent.
National will host a midquarter update on Sept. 4.
Altera (ALTR), which makes programmable chips, dropped 6 percent to $11.63. Executives will host a midquarter update after Tuesday's closing bell. Currently, analysts
expect earnings of 6 cents a share on revenue of $180.7 million, on average.
Competitors to Altera dropped between 3 and 6 percent: Xilinx (XLNX), Cypress (CY), Lattice (LSCC) and Actel (ACTL).
Prudential cut earnings and revenue estimates for Taiwan Semiconductor (TSM) and United Microelectronics (UMC) on the belief that business for the foundries is tracking
"incrementally weaker" for the third quarter as some customers reduce wafer start forecasts. Analysts said the two had become more cautious than a month earlier.
Chip equipment stocks fell significantly. Applied Materials (AMAT) lost 6 percent to $14.11, Teradyne (TER) lost 4 percent to $14 and Novellus (NVLS) shed 5 percent to
$25.23.
The biggest news slated for release after Tuesday's closing bell will come from Hewlett-Packard (HPQ). The tech giant will announce third quarter financial results that will
include Compaq's numbers for the first time. Shares fell 3.9 percent to $14.27. See full story.
Gateway was unchanged while Dell and Apple lost 3 percent each.
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