Intel warning weighs on Wall Street ( 144,000 jobs added in August~~Good news for the President )

Marketwatch ^ | Last Update: 12:22 PM ET Sept. 3, 2004 | Susan Lerner, CBS.MarketWatch.com

[Ernest_at_the_Beach]

NEW YORK (CBS.MW) - An Intel-led a parade of warnings from the chip sector pressured stocks Friday but encouraging news on jobs helped limit broader market losses.

  CBS MARKETWATCH TOP NEWS

U.S. stocks pressured by Intel; jobs data limit losses
U.S. nonfarm payrolls expand by 144,000 in August
Intel shares drop due to lowered goals
Analysts cut targets for Intel, but some still positive

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The tech-heavy Nasdaq Composite Index ($COMPQ:

news, chart, profile) was feeling the brunt of the burden, tumbling 28 points, or 1.5 percent, to 1,845 in midday trade.

Intel plunged 7.4 percent after slashing its revenue estimate for the third quarter to between $8.3 billion and $8.6 billion from a range of $8.6 billion to $9.2 billion and cut its gross margin target to 58 percent from 60 percent.

In its midquarter update, the chipmaker (INTC: news, chart, profile) also said its inventory would increase again instead of remaining flat. See full story.

Analysts lowered their forecasts in reaction to the update but some kept their bullish recommendations on Intel shares, saying valuation levels were getting attractive. Read more on analyst reaction.

Tempering the impact of Intel's update, however, was news that the unemployment rate fell to its lowest level in three years.

The Labor Department estimated that August nonfarm payrolls rose an as expected 144,000, snapping back after two disappointing months. The unemployment rate fell by a tenth percentage point to 5.4 percent, the lowest since October 2001. Numbers for June and July were also revised upwards. See Economic Report.

"I think there are unmistakable trends in the economy that employment is rising and that the unemployment rate is falling... All those things are moving in the right direction," said Joseph Keating, chief investment officer at AmSouth Asset Management Group.

The Dow Jones Industrial Average ($INDU: news,

chart, profile) was bucking the broader market's weakness with four of its components -- Boeing (BA: news, chart, profile), ExxonMobil (XOM: news, chart,

profile), Procter & Gamble (PG: news, chart, profile) and Verizon (VZ: news, chart,

profile) -- touching new 52-week highs intraday. The blue-chip barometer was last down 6 points, or 0.1 percent, to 10,283, after rising as high as 10,321 in earlier trade.

The S&P 500 ($SPX: news, chart, profile) was off 2 points, or 0.2 percent, to 1,115.

Volume remained light heading into the long holiday weekend at about 450 million shares on the New York Stock Exchange and 675 million on the Nasdaq. Decliners outnumbered advancers 19 to 11 on the Big Board and 19 to 9 on the Nasdaq.

"You throw everything in the mix and it's kind of a push today as far as how the market's reading things," said Jay Suskind, director of trading at Ryan, Beck & Co.

"There's not a lot of direction -- no real bad news no real great news and without the players around and the volume light you're not going to see much movement," he said.  

Disappointment in the chip sector wasn't limited to Intel, however, as Altera, Integrated Device Technology and Cypress Semiconductor also lowered their outlooks.

Altera (ALTR: news, chart, profile) said it expects third-quarter sales to come in around $269 million, below its prior prediction for sales of $274 million to $280 million while sales for the quarter are now expected to be flat with the second quarter. Wall Street analysts, on average, had anticipated sales of $276.8 million for the period, according to Thomson First Call. See full story.

Integrated Device (IDTI:

news, chart, profile), meanwhile, said it now expects second-quarter revenue to be down 1 percent to 5 percent from first-quarter revenue of $101.3 million. Previously, the company had estimated revenue for the second quarter to be flat to up 6 percent sequentially.

Cypress (CY: news, chart, profile) joined the club Friday morning, dropping its third-quarter earnings forecast to 11 to 15 cents a share and said it expects revenue 5 to 10 percent below the second quarter's $264.3 million. The First Call forecast had been for earnings of 26 cents a share for the quarter.

Altera shares fell 5.7 percent; IDTI dropped 4.1 percent; and Cypress shed 6.4 percent.

In a broader call on the group, Prudential downgraded the semiconductor sector to "unfavorable" from "neutral" citing demand weakness. The PHLX Semiconductor Index ($SOX: news, chart, profile) slumped 4.9 percent. See Hardware Stocks.

Elsewhere in technology, blue chip Hewlett-Packard (HPQ: news,

chart, profile) slid 26 cents to $17.75 in pre-market trade amid a downgrade by A.G. Edwards over concerns about weakness in the PC industry. Shares of Dow component H-P shares lost 2 percent.

Treasury prices fell after the report on jobs. The benchmark 10-year note was down 19/32 at 99 23/32 while its yield ($TNX: news, chart, profile) climbed to 4.29 percent. See Bond Report.

The report was seen as being strong enough to ensure the Federal Reserve remains on a path of measured rate hikes, including a quarter percentage point rate hike at the next meeting Sept. 21.

Short-term interest rate futures contracts traded at the Chicago Board of Trade show hedgers have priced in increased odds for a hike this month after the report. The chance for a quarter-point hike to the Fed's current 1.50 percent target is now 96 percent vs. around 80 percent ahead of the report.

In Friday's other economic news, the Institute for Supply Management reported that its nonmanufacturing index fell to 58.2 percent from 64.8 percent in July, indicating a slower pace of expansion. Read more.

The U.S. dollar rallied in the wake of the jobs report. The dollar rose 0.8 percent versus the Japanese yen at 110.32 yen. The dollar was up 1 percent at $1.2045 euro. See Currencies.

In the commodities market, gold futures were trading at their lowest levels since mid-August. December gold was down $6.90 at $401.10 an ounce on the New York Mercantile Exchange. See Metals Stocks.

Crude-oil futures were heading higher. Crude for October delivery was last up 16 cents at $44.22 a barrel in New York. See Futures Movers.

	Susan Lerner is a reporter for CBS.MarketWatch.com.

More MARKET SNAPSHOT
•U.S. stocks surge, with Dow at two-month high 5:13pm ET 09/02/04
•U.S. stocks end mostly higher despite crude spike 5:08pm ET 09/01/04
•U.S. stocks end higher after late-day rebound 5:04pm ET 08/31/04
•U.S. stocks end at session lows in thin trade 5:00pm ET 08/30/04
•U.S. stocks seen shifting into a slow mode 2:17pm ET 08/29/04

Latest Industry News   Get Alerted on News in this Industry
•Intel shares drop to 15-month low on lowered goals 12:25pm ET 09/03/04
•Europe turns up on U.S. jobless data, chipmakers drop 12:01pm ET 09/03/04
•U.S. Trade Rep: Kerry falling into isolationist trap 12:00pm ET 09/03/04
•ASML holds to outlook after Intel update 11:51am ET 09/03/04
•Altera falls on lower quarterly sales outlook 10:54am ET 09/03/04

[talleyman]

"I think there are unmistakable trends in the economy that employment is rising and that the unemployment rate is falling... All those things are moving in the right direction," ...

We're doomed!

[Ernest_at_the_Beach]

Competition in the Microprocessor arena is gonna get whitehot . AMD's Athlon64 is being widely accepted and now both Intel and AMD are going to decrease the trace size and increase the transistors per chip by adding a second processor on the chip.

_____________________________________________________________________________________________

Intel will demo its first multi-core CPU at IDF
By duke on Thursday, September 2, 2004 at 10:04 AM EST [ 7 Comments ] #3240

EE Times is reporting that Intel will demo its first multi-core processor at IDF.

Mark down Sept. 7 as the date Intel Corp. unofficially switches from frequency to parallelism as its main microprocessor philosophy. That's when President Paul Otellini will publicly demonstrate Intel's first dual-core processor as part of a keynote at the Intel Developer Forum (Sept 7-9).

For more information, read their article.

________________________________________________________________________________

Dual-Core Opteron Pictures @ AMDZone
By duke on Thursday, September 2, 2004 at 10:15 AM EST [ 16 Comments ] #3242

The girls over at AMDZone have managed to obtain some photos of a 90nm dual-core Opteron.

If you'd like to check it out for yourself and possibly peruse some design information, click here.

___________________________________________________________________________________________

I am posting this from an AMD64 powered puter (only the lowend 3000+ though ). But the fantastic screen savers included with the Fedora Core2 operating system consumes more cycles than I am able to with my posting and browsing the internet and having from 20 to 60 windows open. The power that is coming is unbelievable. And Fry's is helping the Manufacturers clean out their Warehouses before the next wave of rotating disk technology hits us.

Damn just looking thru this morning's LA Times Fry's 4 page Color Ad's, haven't even opened it yet and I see :

Seagate 200 Gigabyte Ultra/100 hard drive 8Mbyte buffer, 7200 rpm, I believe these have 5 year warranty, Store price is $119.99 with $60 rebate giving us $59.99 after Rebate.

I thought they had cleaned out the warehouses but I guess Seagate is late to the party.

[Grampa Dave]

The link below will take Freepers to a page where 126 ETF's are listed re how they are doing each day in the market.

http://finance.yahoo.com/etf/browser/mkt?c=0&k=5&f=0&o=d&cs=1&ce=126

[Ernest_at_the_Beach]

Thanks, got that bookmarked now.

[Grampa Dave]

At first I look an the indexes in America as provided by Sierra Wasp.

Then I check my etfs, and then go to this link to see what is happening, not the CBS/Bloomberg spin.

[Ernest_at_the_Beach]

Thanks. At first I look an the indexes in America as provided by Sierra Wasp.

Hey Waspman, what's this Indexes URL?

[Moonman62]

What size air conditioner will I need for all this new technology just to browse the web and play mp3's?

[SunkenCiv]

There are plenty of Wallstreet involved types who have never worked in a market where there wasn't dominance by the tech companies. Intel has been peddling a lower cost for a while now, in an attempt to recapture market share. My bro-in-law complained that a Dell deal through his employer was only a couple dozen dollars different from buying through the Dell website directly, and it used the cheaper chip, which he doesn't think he wants.

[Ernest_at_the_Beach]

The new AMD chips run cooler than the Athlon XP Palamino.

The AMD64 chips with the proper motherboards have a new technology called Cool and Quiet. Works well, I have mine in a Gigabyte mid line board and with what I am doing , and my probe on the side of the heat sink I am under 33C degrees, that is below body temperature, 93 F degrees approx, of course the machine is idling at 5% utilization according to the system monitor supplied by Fedora Linux. (Redhats free Linux version )

All mounted in a Thermaltake tower case with as many as 7 fans , at the momment I have been working on things so I have the side panel with two fans out of the case and the side panel off and a fan blowing into the room, but when put back together temps won't go up much. Heatsink is just what came with the retail boxed AMD64.

Now the new intel Prescott, runs hotter than H**L.

[Ernest_at_the_Beach]

I am going with the AMD64 processor, just an excellent chip.

I am also assembling my own stuff, having a blast, course I have everything in a constant state of flux, boxes of stuff everywhere, things yet to be installed, or removed, books and manuals everywhere.

Working on learning another operating system , now that is kind of like a busman's holiday since I was always dealing with them when working for IBM.

But I always thought it was great.

But I am a piker compared to Radioastronomer.

I think he has his own Power substation.

He has forgotten more than I have learned about Minis and Workstations,.

[prophetic]

AMD bump + DNC suicide watch bump

[Moonman62]

It's good that some people push the envelope, because that creates more opportunities for those who don't. But having fans on the chipsets, the video cards, and hard drives and a case with seven fans isn't my idea of fun. I like to underclock or get a mobile chip just so I don't have to run another fan. I use Knoppix, because it gives me the least trouble with my hardware, but it's still beta quality at best. Every now and then I'll go back to Win95.

[Ernest_at_the_Beach]

What are you running hardware wise?

[Moonman62]

566 mhz pentium III, 192 meg ram, rage128 video, 40g 7200rpm drive.

[RadioAstronomer]

He has forgotten more than I have learned about Minis and Workstations,.

Thanks for the compliment! :-)

However, you are certainly no slouch in this subject yourself. :-)