*** Chip Article ***
Chips crumble on growth concerns
By Binti Harvey, CBS MarketWatch
Last Update: 12:30 PM ET Dec 10, 1998 NewsWatch
NEW YORK (CBS.MW) -- Hardware issues sold off Thursday as semiconductor optimism dissipated. The Philadelphia Semiconductor Index shed 3.3 percent.
Most chip shares traded lower as Wall Street questioned the validity of investors' exuberance in recent weeks. "Semiconductor shares were undervalued going into October, but we're concerned that the market's expectations of growth in the first half of 1999 may be dashed," said Dan Scovel, chip analyst for Fahnestock & Co.
Intel (INTC) fell 2 1/4 to 116 15/16, Texas Instruments (TXN) was off 2 3/4 at 82 3/16 and Micron (MU) fell1 7/16 to 49 3/8.
Equipment makers also stumbled, including Applied Materials (AMAT), off 2 at 41 7/16 and KLA-Tencor (KLAC), down 2 9/16 at 42 3/8.
"Semiconductors have been on a heck of a run, up 85 percent in the past nine weeks," Scovel said. "We were with them for about a third of those gains, but after that we backed off."
Given the high expectations built into current share prices, Scovel is "mostly bearish" on the group. "This month will be telling in terms of the outlook for next year," Scovel noted.
Fears of slowing demand also made investors wary of computer issues. IBM (IBM) fell 2 9/16 to 166 7/8, Hewlett-Packard (HWP), 1 5/16 to 64 3/4 and Compaq (CPQ) fell 1 3/8 to 40 5/16.
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Wait a second, didn't the Wall Street geniuses just put buys on some of these stocks after the recent huge runup? On some stocks up about 200%+?
Someone help me understand this situation. HA! |
