Part about Intel in Bold.
Intel under pressure after report of chip shortage
By Emily Church, CBS.MarketWatch.com
Last Update: 8:46 AM ET Nov. 28, 2001
LONDON (CBS.MW) - Leading U.S. shares were weaker in pre-open trading on Wednesday with stock futures pointing to a soft start in New York, but shares were recouping some steeper overnight losses.
The Nasdaq 100 tracker stock was (QQQ: news, chart, profile) was down 10 cents to $40.10 - showing some momentum ahead of the open after trading below $40.
Chipmaker Intel Corp. (INTC: news, chart, profile) shares were last down 31 cents at $32, after skidding around 1.5 percent in European trading amid a report in a Taiwan newspaper that it may be unable to meet demand for its Pentium 4 processor as PC sales pick up.
Taiwan PC manufacturers reported shortages of the processor, Taiwan's Commercial Times newspaper said on Wednesday, Bloomberg report.
"We are trying to remedy the tight situation this quarter," Intel spokeswoman Evia Shum told the newswire. The report may boost PC makers, but Intel officials weren't willing to say whether growing Pentium 4 sales show PC rebound in PC demand.
Intel rose 1.4 percent Tuesday after Andy Bryant, the company's chief financial officer, told an audience at a conference sponsored by Credit Suisse First Boston that the chip giant is becoming more comfortable with its earnings forecast for the fourth quarter.
Overnight, JP Morgan H&Q told clients that their sources indicate that Intel's demand for raw wafer and photoresist dropped off in October and November. "We believe Intel's fourth quarter will be characterized by a strong October, followed by a somewhat weak November and December," analyst Eric Chen said, adding that upside to Intel's revenue target of $6.2-6.8 billion "will be difficult."
Microsoft (MSFT: news, chart, profile) was last down 59 cents to $63.15, in line with the declining U.S. large caps. Microsoft indicated on Tuesday that it wants to meet European Officials in an "amicable" and settle the EU's antitrust case against the software maker, AMN Amro notes overnight. "Apparently, given the two recent settlement agreements in the company's pocket, Microsoft lawyers feel like they are on a roll," analyst George Godfrey told clients.
Microsoft said on Tuesday it would forgo December hearings before the EU. The EU is expecting to reach a decision on the case next year, a Commission spokeswoman said Wednesday, Reuters reported.
Earlier, Applied Materials (AMAT: news, chart, profile) was down 47 cents to $41.50 on Instinet and Linear Technology (LLTC: news, chart, profile) was at $40.50, down 26 cents.
Cautionary note on EMC
Shares of EMC (EMC: news, chart, profile) were down 15 cents on Instinet to $17.70 overnight with most leading U.S. issues looking soft, dealers at Madoff Securities said. The stock wasn't as active as the New York open neared.
Morgan Stanley issued a cautionary note on EMC, noting that the shares are up 60 percent since Sept. 21. "The business model shift that has yet to happen is the reason for caution" on EMC stock, which the broker rates a neutral. "While EMC will likely continue to lead its industry, we can't justify paying for perfect execution yet."
The broker was more bullish on Dell Computer (DELL: news, chart, profile), which is also a 60 percent gainer from the Sept. lows. Dell is the "longer term winner," analyst Gillian Munson said. The stock was off 24 cents in small volumes at $26.24 ahead of 9 a.m. Eastern.
Cisco Systems (CSCO: news, chart, profile) was among volume leaders in German trading, and was last down 16 cents to $19.54, shedding some overnight losses ahead of 9 a.m. Eastern, according to data from Nasdaq-Live. Shares of Red Hat (RHAT: news, chart, profile) were down 29 cents to $7.33 in euro trading after running up 27 percent on Tuesday.
Among other overnight comments from the analysts, UBS Warburg expects Novellus Systems (NVLS: news, chart, profile) to reaffirm fourth-quarter earnings and revenue expectations when it gives its mid-quarter update, slated for after Thursday's closing bell. But it sees the chip equipment maker's order expectations -- flat to up 20 percent sequentially -- as "vulnerable." Shares had yet to trade in New York action.
Online gains giving up
Shares of Amazon.com (AMZN: news, chart, profile) and Yahoo (YHOO: news, chart, profile) were also under pressure, looking to give up some of the stocks heady gains for the second day in a row. Amazon was at $11.25, down 23 cents and Yahoo was at $17.05, down 35 cents from Tuesday.
The shares soared earlier in the week on hopes for strong online holiday sales. Online shoppers spent more than $220 million on Monday, the Wall Street Journal reported Wednesday, citing estimates from ComScore.
Enron update
Shares of energy trading group Enron (ENE: news, chart, profile) were unchanged at $4.11. A report in the U.K. Financial Times said an investor group is proposing to put over $1 billion into Enron to support Dynegy's (DYN: news, chart, profile) $9.4 billion rescue bid for Enron.
Emily Church is London bureau chief of CBS.MarketWatch.com. |
