Has

Intel

(INTC:Nasdaq) created expectations that even it can't meet?

The semiconductor manufacturer, which makes nearly 90% of the world's microprocessors that control personal computers, tumbled 2 1/8 to 145 in trading this morning after announcing a record-breaking quarter after the market closed yesterday.

Investors are ignoring the fact that the $2.13 in fourth-quarter earnings that Intel reported was considerably higher than

First Call

estimates or even the $2.00 whisper number that analysts were circulating.

Instead the focus today has been on comments by the company that the first quarter of 1997 will not show sequential growth as margins decrease from the abnormally high 60% to a more traditional 50%.

Anxiety about Intel has dragged down other technology stocks, as well as the broader markets. The situation contrasts sharply with this summer when a strong Intel announcement lifted stocks out of a mini-bear market.

The

Nasdaq Composite

dropped 8.43 to 1337.93 this morning, the

S&P 500

slipped 3.93 to 764.93 and the

Dow Jones Industrial Average

eased 41.95 to 6720.34.

Several other semiconductor stocks fell in sympathy:

Micron Technology

(MU:NYSE) slipped 1/4 to 32 3/4,

LSI

(LSI:NYSE) lost 3/8 to 32 1/4 and

Texas Instruments

(TXN:NYSE) was down 5/8 to 67 5/8. The exception was

AMD

(AMD:NYSE), which is the only company to make a rival microprocessor and will launch its K6 Pentium Pro comparable chip this year. AMD was up 1 1/4 to33 3/4.

After the market closes today,

Sun Microsystems

(SUNW:Nasdaq) will announce earnings for its fourth quarter, and according to First Call, consensus estimates are $0.42 per share. But according to

CNBC

, Wall Street is expecting a higher number because of the company's success in the exploding Intranet market. Sun's stock was up 1/2 to 29 1/4.

On the downside,

Apple Computers

(AAPL:Nasdaq) will report exactly how disappointing its first quarter turned out to be. At the MacWorld convention last week, the company warned that it expects losses would be between $0.60 and $1.21 per share. Apple's stock slipped 3/8 to 17 1/2.

By Avi Stieglitz

astieglitz@thestreet.com