US stocks take big dive on Intel warning
Stocks fell sharply on Wall Street today as investors, unnerved by an unexpected revenue warning from Intel, gave up hope that the United States economy and earnings would soon improve.
Investors found plenty of reasons to sell. Late today, Cisco Systems became the third big high-tech company to announce a bleak outlook this week, following Intel and Yahoo!
The Dow ended a five-day winning streak and skidded 213.63 to 10,644.62. The Nasdaq composite index plummeted 115.95 to 2,052.78 and the broader Standard & Poor's 500 index fell 31.32 to 1,233.42.
The latest tech sell-off came as the Nasdaq approached the one-year anniversary of its record high close - 5,048.62 set on March 10, 2000.
The composite has slid about 59% from that high, and many of its stocks are trading at similarly depressed levels. Intel, for example, is trading at about 75% below its March 10 closing price of $120.19.
In addition to the latest bad news from the tech sector, the market was smarting from a Labour Department report that said the nation's employers created 135,000 jobs in February, well ahead of analysts' forecasts of about 75,000.
The data, indicating increasing strength in the economy, might relieve some pressure on the Federal Reserve to lower interest rates as a way of stimulating business activity.
Analysts said the market now expects the Fed to lower rates by a quarter point, or perhaps not at all, when it meets on March 20. Wall Street had been hoping for a half-point reduction.
Intel, a Dow stock, fell $3.81 to $29.44. The company announced late on Thursday that first-quarter sales will miss expectations by 25% and it will cut 5,000 jobs, largely through non-replacement of staff as they leave.
Other tech losers included Cisco, down $2.19 at $20.63, and Intel competitor Applied Micro Devices, down $2.70 at $23.30.
