Updated from 2:53 p.m.

It's all about

Intel

(INTC) - Get Report

. The chipmaker

warned of a revenue shortfall, making this the third straight quarter that the company has issued a warning.

The company also said that it currently sees no pickup in demand and generally sounded pretty gloomy about the entire situation. The stock had lost more than 10% by midafternoon on the news. See the Analyst Action section below for more details on Intel.

It's no surprise that the horrible PC market has affected others like

Microsoft

(MSFT) - Get Report

, which is tasting the nasty backwash from Intel's warning.

Speculation has hit the market that Mr. Softee will join the troubled legions with its own earnings warning. Intel closed down $3.81, or 11.5%, to $29.44; Microsoft was down $2.56, or 4.3%, to $56.69.

And the bad news for the tech sector continued with

Cisco Systems

(CSCO) - Get Report

, which added to the ranks of the unemployed, cutting 5% of its full-time staff, according to

Reuters

.

The networking giant will reportedly make the cuts in the coming weeks to adjust for a sharp downturn in business. Cisco had earlier announced a hiring freeze and a reduction in contract workers.

Cisco said when it

cut its revenue forecast Feb. 6 that it was making efforts to cut costs. Cisco closed down $2.06, or 9%, to $20.75.

Closely watched IPO

Loudcloud

(LDCL)

has started trading, and you can't exactly say it's in the clouds. The stock, which was priced at $6 Thursday evening after being lowered from $8 to $10 a share, closed up 16 cents, or 2.6%, to $6.16.

The stock has been the subject of much speculation as investment bankers

tried to get the deal done. Besides cutting its price, the company, which was started by Marc Andreessen, co-founder of

Netscape

, boosted the number of shares it expected to offer to 25 million from 20 million.

The extra effort was needed because the

IPO market is weak, and investors are concerned about companies with uncertain prospects. Loudcloud is far from becoming profitable. In addition,

Yahoo!'s

(YHOO)

warning Wednesday has injected even more fear into an already wobbly market. Yahoo! closed down 69 cents, or 3.9%, to $17.

Mergers, acquisitions and joint ventures

Hughes Electronics

(GMH)

Chairman Michael Smith has approached

General Electric's

(GE) - Get Report

NBC television network,

SBC Communications

(SBC)

and

Microsoft

(MSFT) - Get Report

about taking a big stake in the company as a prelude to spinning it off, according to the online version of

The Wall Street Journal

.

The report also cites sources as saying the talks with the potential investors are the clearest sign the initial proposal from Rupert Murdoch's

News Corp.

(NWS) - Get Report

to acquire control of Hughes won't go through because of opposition from Smith, other Hughes execs and many shareholders.

The Journal said an alternative deal would allow Smith to stay at the helm of Hughes, while giving Hughes' parent

General Motors

(GM) - Get Report

cash for its stake.

Hughes Electronics ended the trading day down 48 cents, or 2.1%, to $22.90; GE was down $2.06, or 4.5%, to $43.81; SBC ended down 46 cents, or 1%, to $45; Microsoft, as noted above, closed down $2.56, or 4.3%, to $56.69; News Corp. was down 97 cents, or 2.7%, to $34.93; and General Motors was up 50 cents, or 0.9%, to $58.95..

After Thursday's Close

Old Kent

(OK)

and

Fifth Third Bancorp

(FITB) - Get Report

said they will sell six bank branches with $206 million in deposits in order to satisfy regulators prior to completing their merger. The deal is still subject to approval by the

Federal Reserve.

Old Kent closed down $1.01, or 2.5%, to $40.13; Fifth Third Bancorp was down $1.19, or 2.1%, to $54.69.

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Earnings/revenue reports and previews

Alliant Techsystems

(ATK)

said it would meet or exceed earnings expectations for fiscal year 2001 and 2002. Still, the munitions maker and defense contractor expects 2003 earnings to be below expectations. Alliant closed up 5 cents, or 0.1%, to $84.20.

Ameritrade

(AMTD) - Get Report

today lowered revenue projections and reported slow growth in new accounts.

The online brokerage house said it expects fiscal 2001 revenue to be between $470 million and $600 million. During its

fourth-quarter earnings report on Jan. 17, Ameritrade said revenue for the new fiscal year would be between $570 million and $650 million.

Ameritrade, which is based in Omaha, Neb., also lowered revenue projections for its second fiscal quarter, which ends March 30. The company now expects revenue of between $107 million and $126 million, down from previous estimates of $115 to $130 million. Ameritrade closed down 53 cents, or 6.7%, to $7.41.

Silicon Laboratories

(SLAB) - Get Report

cut its outlook for first-quarter revenue for the second time. It cited customer inventory buildup and order cancellations and delays for the downward revision.

The company said it now expects first-quarter revenue to be $13 million to $15 million with a net loss from operations of 3 cents to 5 cents a share. This is a decline from the projected revenue of $16 million to $18 million and earnings per share from operations of about zero to 2 cents that was given in Silicon Laboratories' fourth-quarter 2000 conference call on Jan. 22. Silicon Labs closed down $1.88, or 10.5%, to $15.94.

After Thursday's Close

Actel

(ACTL)

, a maker of circuits, said it expects first-quarter revenues to be down about 20% from the fourth quarter's $60 million figure. Earnings are expected to fall 35% to 40% below fourth-quarter results. The company reported earnings of 45 cents a share for the fourth quarter, putting earnings somewhere between 29 cents a share and 32 cents a share for the quarter. Actel closed down $1.81, or 8.3%, to $20.06.

RF Micro Devices

(RFMD)

lowered its fourth-quarter earnings and revenue estimates for the second time, citing continued weakness in the wireless market, backed-up handset inventories and delays of new handset models.

For the fourth quarter ending March 31, RF Micro Devices now expects to lose 3 cents to 4 cents a share, a reversal of its previous forecast of earnings of 2 cents to 3 cents a share. Twelve analysts surveyed by First Call expect the company, which is based in Greensboro, N.C., to earn 2 cents a share.

The company also expects fourth-quarter revenue of $55 million, down from its original estimate of $72 million. Analysts estimate RF Micro Devices will report revenue of $71.8 million. In the same period one year ago, the company posted a top line of $84.8 million. RF Micro Devices closed down 44 cents, or 3.3%, to $12.94.

Intersil

(ISIL)

said first-quarter revenue will be about 25% lower than the fourth quarter's, rather than just 11% lower than expected. The company expects earnings of about 5 cents a share, well below the First Call estimate of 20 cents a share. Intersil closed down $2.88, or 14.6%, to $16.88.

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Analyst actions

Goodbye, Mr. Chips.

After a surprising warning

Thursday night,

Intel

(INTC) - Get Report

got Wall Street's brokerages talking prior to the market open on Friday morning. Most expressed caution to investors about owning the stock, while dropping their estimates to keep in line with new guidance from the chipmaker.

Intel's first-quarter revenue will plunge 25%, instead of the 15% falloff the company had previously announced. Revenues will come in around $6.5 billion, much lower than the $7.4 billion expected by analysts and the previous quarter's $8.7 billion. That's quite a heavy slowdown. And since Intel is a technology linchpin, the news is quite bad for all of technology -- not just the company.

Intel closed down $3.81, or 11.5%, to $29.44.

Analysts grappled with the situation, firing off notes to anxious investors in need of advice about what to do. And since Intel did not give any specific earnings guidance in its call, only revenue guidance, analysts were forced to come up with their own forecasts. A wide variety of numbers for 2001 and 2002 have been unleashed on investors.

According to

Lehman Brothers

analyst

Dan Niles, Intel's woes are far from over.

"Intel sees no signs of a pickup and would not call this quarter the bottom for revenues," he said. "We do not think the bottom will be reached until the summer at the earliest and continue to be cautious on the stock."

Niles dropped his 2001 earnings-per-share estimate to 70 cents from 90 cents, while cutting his 2002 earnings-per-share target to 80 cents from $1.10. He maintained his market perform rating on the stock.

Merrill Lynch's

Joe Osha said he did not view the blue-chip as a core long-term holding in the semiconductor business.

"This latest miss reveals just how dependent Intel has become on high-end server and desktop businesses to sustain average selling prices that are under pressure," he wrote, dropping his 2001 earnings estimate to 81 cents from $1.17.

Credit Suisse First Boston

analyst

Charlie Glavin cut his price target to $30 from $33 and drastically hacked at his 2001 earnings estimate, cutting it to 56 cents a share from 92 cents -- a 39% reduction.

And don't count on personal computers to help bail out the company. "There are no clear catalysts for PCs, and we firmly believe that PCs will not lead the recovery, but will be a follower," he wrote.

The ripple effect of the Intel warning will shake the very foundations of the tech world.

Goldman Sachs'

Rick Sherlund said that Intel's preannouncement will raise eyebrows about

Microsoft's

(MSFT) - Get Report

quarter. And although he made no changes to his rating and estimates for the company, he did illustrate the incestuous nature of the technology field. When major companies warn, the damage is rarely isolated.

"Our estimates may still be a bit high, but the stock appears resistant to our somewhat moderate revenue estimate reductions," he wrote. "Our $6.2 billion estimate could be closer to $6.1 billion, if we were to presume even slower server growth, (implied by

Oracle's

(ORCL) - Get Report

preannouncement), even weaker advertising revenues, (implied by

Yahoo's

(YHOO)

preannouncement), and slower PC growth, perhaps implied by Intel's preannouncement."

Oracle closed down $1.13, or 6.4%, to $16.38; Yahoo! closed down 69 cents, or 3.9%, to $17.

Over at Merrill Lynch, analyst Alex Baluta wasted no time in cutting back his estimates on Microsoft, dropping his 2001 earnings-per-share target to $1.77 from $1.82. He maintained his long-term attractive rating on the stock, but cited Intel's weakness along with weak online advertising and the potential of a European slowdown as major factors in the call.

Other chipmakers felt the fury from Merrill. Analyst Eric Rothdeutsch trimmed his estimates on

Advanced Micro Devices

(AMD) - Get Report

, cutting his 2001 earnings target to $1.50 a share from $1.90 a share -- much lower than the current Wall Street consensus of $1.82 a share. His 2002 target was cut to $1.90 from $2.15, also lower than the consensus estimate of $2.22. AMD ended the day down $2.70, or 10.4%, to $23.30.

"Intel, last night in its preannouncement conference call, indicated that the slowdown seen over the last few quarters in the PC market has spread to its non-PC-related businesses, namely, server, cell phone and networking products across all sectors and geographies," he wrote.

AMD makes flash memory, an important component in cell phones. As a result of Intel's falloff in its flash memory products, Rothdeutsch followed suit and adjusted his estimates accordingly. But, he maintained a buy rating on the company and said AMD's only real weakness was in flash memory. He believes that AMD is gaining market share for its Athlon processor against Intel's popular Pentium brand.

SG Cowen

examined the affect on the PC market, calling

Compaq

(CPQ)

the most exposed company among the names it tracks. According to the brokerage, which has a neutral rating on the company, Intel provided 14% of Compaq's fourth-quarter revenues. It was followed by

Dell

(DELL) - Get Report

, with 9% of its fourth-quarter revenues from Intel, and

Hewlett-Packard

(HWP)

, which derived 4% of first-quarter revenues from its fellow blue-chip. Compaq closed down $2.76, or 12.98%, to $18.50; Dell was down $2.75, or 10.5%, to $23.38; H-P was down $1.42, or 4.5%, to $30.25.

"In all of these cases, we have assumed weakness in the current quarter, although the Intel comment suggests that the softness may be more pronounced than we had assumed," the brokerage wrote to clients.

Upgrades

Cytec Industries

(CYT)

: UP to U.S. Recommended for Purchase List from market outperform at Goldman Sachs. Cytec closed up 40 cents, or 1.1%, to $35.90.

Waste Management

(WMI)

: UP to strong buy from buy at Credit Suisse First Boston. Waste Management closed down 20 cents, or 0.7%, to $26.95.

Wausau-Mosinee Paper

(WMO)

: UP to U.S. recommended for purchase list from buy at Goldman Sachs. Wausau-Mosinee closed up 51 cents, or 4.6%, to $11.53.

Downgrades

Fleet Boston Financial

(FBF)

: DOWN to market outperform at

Salomon Smith Barney

. Fleet Boston Financial closed down $1.80, or 4.4%, to $38.70.

Motorola

(MOT)

: DOWN to accumulate from buy at Merrill Lynch. Motorola closed down 70 cents, or 4.3%, to $15.55.

Initiations

Ace Limited

(ACL)

: NEW buy at Lehman Brothers; price target: $45. Ace Limited closed up 25 cents, or 0.7%, to $37.96.

HCC Insurance Holdings

(HCC) - Get Report

: NEW strong buy at Lehman Brothers; price target: $30. HCC closed down 9 cents, or 0.4%, to $25.12.

ITT Industries

(ITT) - Get Report

: NEW market perform at Lehman Brothers; price target: $45. ITT closed down 84 cents, or 1.9%, to $42.65.

Watson Pharmaceuticals

(WPI)

: NEW buy at

SG Cowen

; price target: $55. Watson closed down 85 cents, or 1.6%, to $54.15.

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Offerings and stock actions

The

Securities and Exchange Commission

is investigating the timing of stock sales by

Amazon.com

(AMZN) - Get Report

Chairman Jeff Bezos,

The New York Times

reported Friday, citing a "a person close to the matter."

Regulators are focusing on stock Bezos sold last month just before the release of a highly critical

Lehman Brothers

report, the

Times

said. Amazon.com closed up 56 cents, or 4.8%, to $12.25.

After Thursday's Close

St. Paul Cos.

(SPC)

said it will sell 1.73 million shares to

RenaissanceRe Holdings

(RNR) - Get Report

at $72.20 a share, for proceeds of $125 million. St. Paul Cos. closed down $1.46, or 3.1%, to $46.15; RenaissanceRe closed down 80 cents, or 1.1%, to $72.50.

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Miscellany

Internet companies operator

CMGI

(CMGI)

said it will continue to support its venture capital affiliate

@Ventures

as well as to maintain its corporate restructuring.

CMGI's backing will allow @Ventures to invest in new technologies, which CMGI said is important to its larger business model. CMGI closed down 22 cents, or 5.1%, to $4.09.

Ford

(F) - Get Report

said Friday its global marketing chief, Bob Rewey, was retiring after little more than a year on the job.

Rewey, 62, took the job in January 2000 and was previously group vice president of marketing, sales and service for Ford's automotive operations. He had been with Ford for 38 years.

The automaker named Brian Kelley, 40, as vice president of global consumer services. Kelly had been vice president and general manager for sales and distribution with

General Electric's

(GE) - Get Report

appliance division, Ford said. His position will be filled by Karen Francis, the former head of

General Motors

(GM) - Get Report

expiring Oldsmobile division.

Ford closed down 25 cents, of 0.8%, to $30.10; as noted above, GE was down $2.06, or 4.5%, to $43.81, and General Motors was up 50 cents, or 0.9%, to $58.95.

SBS Technologies

(SBSE)

, a computer componentmaker, named Grahame Rance as president and CEO, succeeding Christopher Amenson. Rance was previously president and CEO of Caspian Networks. Amenson will remain chairman. SBS Tech closed down $1.25, or 6.9%, to $16.88.

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