Sector Watch: Chips Dip, Online Brokers Under Pressure

Semiconductors were taking a tumble after some crummy earnings news from last week lingered into trading today.

Micron Technology(MU Quote) was continuing to pressure the Philadelphia Stock Exchange Semiconductor Index, which was lower by 2.2%. The chipmaker last week reported earnings that slightly beat estimates, but that were below year-ago estimates. With all eyes on inventory levels, it didn't help when Micron said its stockpiles increased.

But semis had at least one fan in W.R. Hambrecht's Jim Liang, who upped his ratings Xilinx(XLNX Quote) and Altera(ALTR Quote). The pair of chipmakers, which have fallen to 17-month lows, were upgraded to buy from neutral because Liang said they'd had enough -- falling to their historical troughs in terms of valuations.

On Friday, Salomon Smith Barney trimmed Xilinx's price target and 2002 estimate views, and it cut 2001 and 2002 EPS views on Altera and LSI Logic(LSI Quote).

From semiconductors to stocks. TheStreet.com E-Finance Index was down 4.8% after yet another announcement of layoffs by one of its members. Online brokerage Ameritrade(AMTD Quote) reportedly will cut 7% of its workforce. In January, the company said it would lay off 230 people because of the downturn in trading volume. The news follows on the heels of other recent job cuts at Charles Schwab(SCH Quote) and CSFBdirect(DIR Quote).

J.P. Morgan last week cut earnings and revenue estimates on five financial companies -- Ameritrade, CSFBdirect, E*Trade(ET Quote), Knight Trading(NITE Quote) and TD Waterhouse(TWE Quote).