(Updated from 11:47 a.m. ET)

Shares of

Intel

(INTC) - Get Report

closed down 11.9% after

Salomon Smith Barney

cut its earnings and revenue forecasts and sliced its 12-month price target to $50 from $75.

Chip stocks, many of which started the day higher on strong earnings from equipment maker

Axcelis Technologies

(ACLS) - Get Report

, fell in sympathy with Intel. The

Semiconductor Index

( SOX) ended the day down 5.8%. Specialty chipmaker

Altera

(ALTR) - Get Report

, which rose early ahead of an earnings report Monday afternoon, ended the day down 5.3%.

Salomon cut its revenue-growth forecast for Intel to 2% from 4% for the third-quarter and its EPS outlook for the period to 37 cents from 38 cents. For the fourth quarter, Salomon cut its earnings estimate to 37 cents a share from 40 cents. The brokerage lowered its 2001 EPS outlook for Intel to $1.55 from $1.75. Intel is due to report third-quarter results after Tuesday's close.