Easy come, easy go. As investors mark the anniversary of
Nasdaq 5000 with pits in their stomachs and holes in their pockets, a profit warning from
has brought the major stock market indices to their knees.
Yesterday evening, Intel announced that first-quarter revenue would fall about 25% below fourth-quarter levels. The semiconductor manufacturer also said that it would eliminate 5,000 jobs. In recent trading, the chipmaker was trading down 9.4% to $30.17. The
Philadelphia Stock Exchange Semiconductor Index
, which tracks the chip industry, was lower 4.3%.
In its statement, the chipmaker cited familiar culprits for its shortfall: slowdowns in PC demand and the broader U.S. economy. Intel chairman Andy Grove had given Wall Street a heads-up prior to last night's announcement, confessing on Tuesday night that he didn't see demand for semiconductors snapping back quickly. Among the investment firms to cut their earnings-per-share estimates for Intel this morning were
Credit Suisse First Boston
To be sure, Intel was not the only technology bellwether in hot water this morning. Citing a source close to
reported this morning that the networking equipment manufacturer planned to cut 5% of its workforce. At last look, Cisco had shed 5.2%.
Elsewhere, speculation that
will follow Intel with a warning, dragged its stock down 2.1% to $58 in recent action. Back in January, Microsoft memorably issued a profit warning for the first time in a decade, pointing to a falloff in demand for computers.
Making matters worse this morning was a stronger-than-expected
employment report.. New nonfarm payrolls for the month totaled 135,000,
almost double the 68,000 economists were forecasting. Unemployment stayed put at 4.2% -- economists had expected it to tick up to 4.3%.