Analyst pessimism about
Intel sinks stocks

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By Amy Baldwin
Associated Press

NEW YORK >> Sullen investors sent stocks lower today, forcing the Dow Jones industrials down more than 100 points as Wall Street retreated from last week's optimism about the semiconductor industry.

Uncertainty about the economy and earnings ruled the market after Salomon Smith Barney reduced profit and revenue targets for Intel and Lehman Brothers said the chip maker will cut prices in half on its Pentium 4 processor. The news disturbed investors who last week bid chip stocks higher on bullish comments from other analysts and Intel itself.

"Whenever we think we can go back in and play again, something like this happens," lamented Charles Pradilla, chief investment strategist for SG Cowen Securities.

The Dow Jones industrial average finished the session down 111.47 at 10,401.31. One of the Dow's biggest losers was Intel, which ended down $1.40 at $30.28.

The market's broader indicators also declined. The Nasdaq composite index fell 32.07 to 2,034.26, and the Standard & Poor's 500 index declined 13.87 at 1,200.48.

Decliners outnumbered advancers 3 to 2 on the New York Stock Exchange, with 1,870 down, 1,193 up and 230 unchanged. Volume was 809.51 million shares vs. 929.63 million shares on Friday.

The NYSE composite index fell 6.18 to 610.13, the American Stock Exchange composite index lost 4.40 to 882.98 and the Russell 2000 index fell 6.19 to 480.96.

The Treasury's 10-year note was unchanged at 9827/32; its yield remained at 5.15 percent. The 30-year bond fell 5/32 to 9627/32; its yield rose 1 basis point to 5.60 percent.

Stock prices had been expected to trend higher this month as investors got a respite following the dismal second-quarter earnings results most companies released in July. Instead, Wall Street has been stymied as few companies can say they expect business to improve and virtually none can prove that it already has picked up.

"There is just no indication that this market will turn on a dime," said Alan Ackerman, executive vice president of Fahnestock & Co.

Chip makers tugged the tech sector down with Intel's chief competitor, Advanced Micro Devices, falling $1.63 to $17.62 and Vitesse Semiconductor declining 45 cents to $21.26. The wavering sentiments on the semiconductor industry illustrate the uneasiness that is pervasive on Wall Street.

"It shows how much tentativeness and uncertainty there is out there," Ackerman said. "Investors are in no hurry to buy."

Other tech losers included Dow industrial IBM, down $1.67 at $106.51, and Cisco Systems, which slipped 51 cents to $19.54 and is scheduled to release its fiscal fourth-quarter earnings tomorrow.

Blue-chip losses were widespread. The biggest decliners included retailers, expected to issue poor July sales results on Thursday.

Radio Shack, which said today that July sales slipped 6 percent over last year and was downgraded by Merrill Lynch, tumbled $2.45 to $26.46.