Updated from 1:05 p.m. EDT

Dell's ( DELL) rare move of lowering financial targets had investors scrambling on Friday, knocking nearly 8% off the company's share price, as tougher times have suddenly appeared to have set in.

And it's not clear when they'll go away.

Dell was recently down $3.07 to $36.51 on Friday -- its lowest level since early May.

Late Thursday, Dell hit its second-quarter earnings-per-share target but missed Wall Street's sales target by $300 million. The company reported net income of 41 cents a share, or 38 cents when excluding a tax provision, and sales of $13.4 billion.

The company blamed overly aggressive pricing in the U.S. consumer market and a sound drop-off in spending by the U.S. federal government as the main culprits for the quarter.

To the first issue, Dell dropped its prices in the quarter on certain products, expecting to make up for the lost revenue through a commensurate increase in volume. The snapback didn't materialize, and Dell couldn't reach expected sales goals.

In effect, consumers weren't willing to spend money on additional products just because prices were lowered. This isn't a good sign heading into the part of the year when the consumer is supposed to be spending heavily for fancy electronics gear and computers. Domestic consumers make up some 10% of Dell's sales.

As for federal spending, which makes up close to 20% of Dell's total revenue, Dell said it's been weak for the past year, and the company saw this business slumping more notably in the second quarter. It doesn't anticipate this business coming back in the third quarter.

Also troubling: Component pricing isn't expected to decline as much in the third quarter as it did in the second quarter due to tight supplies, which could act as a bit of a squeeze on profits. CEO Kevin Rollins said he was able to get the supplies he needed, but the market is "tighter than it has been for awhile." This, too, is expected to continue in the third quarter. He singled out shortages of some processors and chipsets from Intel ( INTC).

All of these factors contributed to a ripple effect through the stock market, as the Nasdaq gave back its four-week gain. Intel, Dell's sole supplier of chips, dropped 2% to $26.26. Applied Materials ( AMAT), the largest maker of chip manufacturing tools, shed 1.6% to $17.50. The other box makers, like Hewlett-Packard ( HPQ), Apple ( AAPL) and Gateway ( GTW) each dropped, but only nominally.

"PC demand is likely softening," said analyst Chris Whitmore of Deutsche Bank in a Friday morning note. His firm has received noninvestment banking revenue from Intel in the past year.

This isn't the first time such an opinion was expressed. Industry researchers cautioned a month ago that the strong demand for PCs earlier this year wouldn't likely continue through the end of the year. Also, speculation about another inventory build in semiconductors was rekindled this week.

Elsewhere on Wall Street, some analysts were willing to overlook the revenue miss, taking a big-picture view.

Needham analyst Charlie Wolf noted that a 2% revenue miss was met by an incommensurate 8% drop in the stock. "The market's focus on quarterly results has become an obsession," he wrote to clients on Friday. Wolf has a financial interest in Dell securities.

"With its competitively superior direct distribution model, Dell continues to gain share in all of its markets and to grow revenues and earnings at mid-teen's rates, which is by far the fastest in the computer hardware industry."

The opposing views of Whitmore and Wolf are indicative of the bifurcation among analysts regarding the significance of Dell's second-quarter results.

These split opinions simply serve to highlight the ongoing crosscurrents for investors. From record oil prices and climbing interest rates to uncertainty regarding technology spending later this year, investors are stuck wondering where their money is headed.

More details will likely emerge Tuesday when Hewlett-Packard reports its financial results. Investors have run tech stocks higher in the past three months on hopes of better things to come, but Friday served as a wake-up call that nothing is guaranteed, even for the bluest of the blue chips.

Despite its renown for a hyper-efficient supply chain and direct-sales customer insight, Dell misplayed the second quarter due to mistakenly interpreting those customer insights. Its investors responded by completely erasing the stock's rally in the past three months in one day of trading.

These are tough times, indeed.