THE WEEK AHEAD: Intel, earnings in focus

Intel's third-quarter sales warning sent technology investors into a panic Friday, turning an already bad week of trading into an ugly one. Next week, 3Com and Micron Electronics report their quarterly results.

For the week, the Dow Jones industrial average fell 80 points to 10,847.37 while the Nasdaq composite plunged 32 points to 3,803.60.

After two weeks of profit warnings from various technology firms, Intel's announcement that its third-quarter sales will fall short of previous estimates took its toll. Leading technology stocks from all sectors lost ground in the wake of the warning.

Chip and chip-equipment stocks were especially hard hit.

"We are downgrading the semiconductor equipment group ... based on an increasing number of data points that suggest short-term end-chip-demand is slower than initially believed,'' SG Cowen analyst Tia-min Pang said in a note to clients.

He said he cut his investment ratings on six semiconductor equipment stocks to ``buy'' from ``strong buy.''

The semiconductor equipment industry supplies the wafer fabrication machines, the microscopic cameras used to print transistors, and the manufacturing, assembly and testing equipment used to produce computer chips.

The sector is highly dependent on underlying demand for new electronics products, which in turn fuels orders for additional factory capacity.

``The Intel pre-announcement increases our concern that end-market demand is weak and also increases the potential for equipment pushouts from the world's largest capital spender,'' Salomon Smith Barney analyst Glen Yeung told clients.

Intel shares lost more than 24 percent of their value Friday even though the company still figures to meet analysts third-quarter profit estimates.

Looking ahead to next week, investors will be paying close attention to several significant technology earnings reports.

3Com (Nasdaq: COMS) will report its first-quarter results with analysts' expecting a loss of 34 cents a share.

Last quarter, 3Com beat the Street, losing $146.8 million, or 42 cents a share, on sales of $763.7 million.

Micron Electronics (Nasdaq: MUEI) is set to report its fourth-quarter earnings next week.

First Call Corp. consensus expects its to earn 9 cents a share in the quarter.

The PC maker topped analysts' estimates, earning $5 million, or 5 cents a share, on sales of $370 million.

Palm (Nasdaq: PALM) will report its first-quarter results with analysts expecting a profit of 2 cents a share.

Last quarter, it raked in $16.9 million, or 3 cents a share, on sales of $350.2 million.