Blizzard president departs Simone Biles wins bronze Bill Gates, Melinda Gates officially divorced Google Pixel 6 and 6 Pro unveiled Amazon's Lord of the Rings series 4th stimulus check update

Intel, Microsoft pull Nasdaq down

Intel and Microsoft combine to pull the Nasdaq index down 50 points shortly after trading opens.

There's a whole lot of shaking going on on Wall Street, as Intel (INTC) sent tech stocks falling and analysts revising their forecasts for the chip giant.

Intel at a glance After the markets closed yesterday, Intel said its upcoming results wouldn't be as rosy as expected. Weaker-than-anticipated demand from computer vendors caused Intel to revise its forecast for the first quarter, the company said.

The tech-heavy Nasdaq ($COMPQ) fell 48 points to 1712 from the previous day's close of 1759.7, and the Dow Jones Industrial Average ($INDU) fell to 8444, nearly 95 points off yesterday's close of 8539.

Intel stock dropped 10-7/8, from yesterday's close of 86-7/16. Volume passed 92 million shares, marking the most active the stock has ever seen.

Intel is the most heavily traded stock on the Nasdaq. The top ten included other technology heavyweights Microsoft (MSFT), Dell (DELL), Cisco (CSCO), Sun Microsystems (SUNW), 3Com (COMS), and Oracle (ORCL).

Microsoft closed off 2-1/4 today, dipping to 80-1/16; Dell fell 5 percent, to 131-7/8; Cisco dropped 3-7/16, to 61-13/16; Sun fell 6 percent, to 43-9/16; 3Com dropped 2-3/8, to 35-3/8; Oracle slipped 3/4 to 25-5/16.

Prior to Intel's warning, First Call's consensus estimate was 93 cents per share for the March quarter. For the first quarter a year ago, Intel reported profits of $1.10 a share.

Wall Street analysts reacted to the warning with a round of downgrades and earnings revisions.

Bear Stearns analyst Andrew Neff cut his first-quarter earnings-per-share estimate to Intel's market fallout 73 cents from 91 cents, a source at the brokerage said. Neff cut his 1998 earnings-per-share view to $3 from $3.65, and his 1999 earnings-per-share view to $3.40 from $4. He maintained a "neutral" rating on the stock.

Lehman Brothers analyst Michael Gumport cut his first-quarter estimate on Intel stock to 73 cents per share from 93 cents per share. He also reduced his 1998 earnings-per-share view to $3.30 from $3.85, and his 1999 view to $3.95 from $4.35. Gumport kept his "neutral" rating.

CIBC Oppenheimer analyst Ken Pearlman lowered his rating on Intel shares to "hold," according to a market source.

Price cuts in December and February have not stimulated orders as expected, Pearlman said in a report released today.

"In an unusual move, Intel lowered prices in December on the PII 233MHz product, which was out of the ordinary cycle of price cuts," he said. "It appears that this action, as well as the normal pricing moves that appeared in February, have not stimulated orders as expected."

Morgan Stanley analyst Mark Edelstone reduced the brokerage's 1998 estimate on Intel to $3.25 per share from $4 per share, but kept an "outperform" rating.

Merrill Lynch said analyst Thomas Kurlak had lowered his 1998 earnings estimate to $3 a share from a range of between $3.50 and $3.75 per share. Kurlak estimated that Intel will earn 67 cents a share in the first quarter and maintained a "near-term neutral" and "long-term buy" rating.

BancAmerica Robertson Stephens analyst Dan Niles lowered his first-quarter earnings-per-share estimate on Intel's stock from 93 cents to 73 cents, his fiscal year 1998 earnings-per-share estimate from $3.80 to $2.85, and his fiscal year 1999 earnings-per-share estimate from $4.55 to $3.45.

"It is even worse than we had thought," said Niles. In mid-February Niles estimated that Intel had 21 million processors booked, vs. his estimate of 23 million for the quarter with average selling prices likely down instead of up sequentially. "We now estimate that Intel will ship about 22 million processors, [with] average selling prices down $20 sequentially,."

Reuters contributed to this report.