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Yahoo, Intel Wallop Estimates

A downgrade sends some chip stocks lower.

Two giants of the technology bull market reported earnings today after the market's close, and both beat Wall Street estimates handily.



recorded a $25 million profit, or 21 cents a share, for the fourth quarter of 1998. Analysts surveyed by

First Call

expected a profit of 16 cents a share. In addition, Yahoo announced a 2-for-1 stock split. Yahoo closed trading today down 12 1/2 to 402.


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reported record fourth-quarter revenue and profits. For the fourth quarter, Intel showed net income of $2.1 billion, up 18% from the $1.7 billion reported last year. This translates into fourth-quarter earnings of $1.19 per share compared with $0.98 a share in year-ago period. Analysts had expected earnings of $1.07. At close of trading today, Intel fell 4 3/16 to 135 9/16.

Downgrade Sends Chips Down

On a day when high-tech stocks finally got hit by profit-takers, three chip stocks got hammered after downgrades to neutral from outperform from

Morgan Stanley Dean Witter


Shares of



fell 19 15/16, or 12.76%, to 138.


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also fell 14 9/16, or 13.30%, to 95.

ARM Holdings


fell 7 1/2, or 10.3%, to 66.

"These are three exceptional companies where the fundamentals are intact, but they had big advances and have met valuation levels," said Mark Edelstone, semiconductor analyst with Morgan Stanley Dean Witter. Morgan Stanley Dean Witter underwrites for all three companies.

In the report on Broadcom, Morgan Stanley noted that the stock has rallied 235% since Sept. 1 vs. only a 34% gain for the

S&P 500

. ARM Holdings has reached the firm's 75 price target, while Rambus has reached the its 110 price target. Because they were downgraded to neutral ratings, Morgan Stanley did not set a target price for the companies.

Losses in these stocks contributed to a 3.56% decline in the

Philadelphia Semiconductor Index


What Goes Up...

A number of the big movers that recently seemed to defy gravity finally came down to earth today.

Shares of


finished more than 50 points lower at 223.


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dropped 42 points, and

Network Solutions


slipped 27 points. Even

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participated in the selloff, down 21 points to 163.