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Market Update: Nasdaq Off Lows, But Still Whupped by Intel Woes

Kristen French

Intel(INTC - Cramer's Take - Stockpickr) was a red-hot poker for this morning's market, setting the major indices on fire.

After the semiconductor mammoth and Dow Jones Industrial Average component announced after the close last night that its third-quarter revenue would fall below estimates, the tech-heavy Nasdaq Composite Index seared into the red after the open. It had lately recovered some ground.

Major Indices INDEX CHANGE % VALUE Dow 136.05 -1.26% 10,629.47 S&P 500 23.51 -1.62% 1425.54 Nasdaq 151.82 -3.97% 3677.05 Russell 2000 8.33 -1.62% 506.02 TSC Internet 17.84 -2.30% 759.20 NOTE CHANGE PRICE YIELD 10-Year Treasury 4/32 99 12/32 5.833% Market data as of: 10:29 AM ET, Fri Sep 22 2000

The Dow was off, with Intel burning an 81 point hole in the average. Intel was off 22.4% to $47.75. The S&P 500 , the Russell 2000 and TheStreet.com Internet Sector index were all lower.

Intel's malaise was spreading far and wide among the tech bellwethers. Intel was trading down on gargantuan volume. Computer-networking giant Cisco(CSCO - Cramer's Take - Stockpickr), 2.7% lower, and hardware-maker Dell(DELL - Cramer's Take - Stockpickr), down 9.2%, were the Nasdaq's most actives. Semiconductor Micron Technology(MU - Cramer's Take - Stockpickr) was also off 2.8%. It was downgraded to outperform from buy by Salomon Smith Barney.

Microsoft(MSFT - Cramer's Take - Stockpickr) was 3.2% lower.

IBM(IBM - Cramer's Take - Stockpickr) was up 0.6%. Hewlett-Packard(HWP - Cramer's Take - Stockpickr) was 3.4% higher after the company approved a $1 billion share buyback plan and said it feels comfortable with fourth quarter earnings estimates.

Also trading higher was Coca-Cola(KO - Cramer's Take - Stockpickr), which was lately up 3.5% and adding 11 points of upside to the index. The Dow is calculated based on how stocks close on the New York Stock Exchange . Prices are typically quoted based on how they close in composite trading.

In the mean time, natural gas and oil stocks, pharmaceuticals and insurance stocks were some of the only bright spots in early trading.

But some observers think the bad news is really Intel-specific -- that once the initial scare wears off, investors will rush in to snatch up what look like some pretty good buys.

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Sector Watch

Oil stocks were edging higher, with the American Stock Exchange Oil & Gas Index up 0.3%. Royal Dutch Petroleum(RD - Cramer's Take - Stockpickr) was up 2.1%.

Pharmaceuticals were substantially stronger, as investors looked for a safe haven for their cash, and the American Stock Exchange Pharmaceutical Index was 1.8% higher. Abbot Laboratories(ABT - Cramer's Take - Stockpickr) was 2.9% higher; Merck(MRK - Cramer's Take - Stockpickr) was up 2.7% and Eli Lilly(LLY - Cramer's Take - Stockpickr) was 2.3% higher.

Insurance stocks were also getting a boost, with the S&P 500 Insurance Index up 1.9%.

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Bonds/Economy

This morning's coordinated intervention by Europe, the U.S. and Japan to halt the euro's slide has given a lift to European government bond prices, and Treasuries are rising in tandem. Early extreme weakness in stock index futures is also benefiting the bond market. TheStreet.com wrote a separate story on the efforts to boost the euro.

The 10-year Treasury note was lately up 4/32 at 99 12/32 and yielding 5.833%.

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