(Updated from 4:04 p.m. ET)
A fresh round of profit warnings spooked investors today -- and concerns about how the week might shake out also rattled investors.
Two trading days after
soothed investors with a confirmation about its second-quarter projections, a host of smaller chip companies reminded them a recovery in the sector isn't necessarily under way.
this morning lowered its revenue outlook for the third quarter because of continued weakness in the industry. The firm cut 20% of its workforce.
cautioned that fourth-quarter results would be below expectations and eliminated 6% of its staff. The
Philadelphia Stock Exchange Semiconductor Index
, or SOX, fell 3.4%.
Chip stocks weren't alone on the downside. The
Nasdaq Composite was lower by 44, or 2%, to 2171. Still, it came off its lows of the day. The
Dow Jones Industrial Average, also off its lows, lost 55 to 10,922. Intel was among the stocks putting pressure on the
blue-chips, dropping 1.1% to $30.33. Drug company
slipped 2.7% to $72.25.
S&P 500 shed 11 points to 1254. Among market sectors, networking, drug, cyclical, retail and Internet stocks fell. Oil and utility stocks rose, but only modestly.
There was no major news driving the market today, and trading volume was very light.
The Warnings Watch
Today's confessions come on the heels of a downbeat second-quarter revenue forecast from
on Friday before the market opened. The warnings have Wall Street worried about the corporate bottom line. "Maybe investors got ahead of themselves by pricing in an optimistic scenario for the warnings season. And now, they're hedging their bets," said Peter Coolidge, managing director of trading at
Brean Murray Foster Securities
Investors were buoyed for most of last week by optimism about corporate earnings, but the major indices racked up losses on Friday -- and followed through with more losses today. "The Juniper news more than upset the positive effect of Intel's statement," said Coolidge. Last Thursday, chipmaker Intel confirmed it was on track to meet earnings and revenue estimates for its current quarter. Other companies with recent good news on the earnings front include telecom-equipment provider
and communications-chip maker
But Juniper has plenty of company in the confessions department, including
J.P. Morgan Chase
Electronic-manufacturing service companies were trading lower today after a downgrade from
. The firm cut its recommendation on
. The stocks each lost more than 5% today.
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